Regardless, if it is underwater, I would get CMAs and derive my offer from the current market.

IMO the window is open and investors should be focused on building a geographically diversified portfolio of SFR, MFR, and commercial real property or derivative there of.

Profit is derived from sold price minus expenses, so if the development costs inflate and or the sold price reduced, you eat into profits and that is not affected by the LTV.

The adjusted cost basis is derived by subtracting the depreciation taken from the original cost basis (plus any capital improvements, if any).

I suppose that since you end up with less than 70% of ARV, this formula is conservative, but its derivation is completely nonsensical.

c) Exceptions The term ''personal holding company'' as defined in subsection (a) does not include - (1) a corporation exempt from tax under subchapter F (sec. 501 and following); (2) a bank as defined in section 581, or a domestic building and loan association within the meaning of section 7701(a)(19); (3) a life insurance company; (4) a surety company; (5) a foreign corporation, (6) a lending or finance company if - (A) 60 percent or more of its ordinary gross income (as defined in section 543(b)(1)) is derived directly from the active and regular conduct of a lending or finance business; (B) the personal holding company income for the taxable year (computed without regard to income described in subsection (d)(3) and income derived directly from the active and regular conduct of a lending or finance business, and computed by including as personal holding company income the entire amount of the gross income from rents, royalties, produced film rents, and compensation for use of corporate property by shareholders) is not more than 20 percent of the ordinary gross income; (C) the sum of the deductions which are directly allocable to the active and regular conduct of its lending or finance business equals or exceeds the sum of - (i) 15 percent of so much of the ordinary gross income derived therefrom as does not exceed $500,000, plus (ii) 5 percent of so much of the ordinary gross income derived therefrom as exceeds $500,000; and (D) the loans to a person who is a shareholder in such company during the taxable year by or for whom 10 percent or more in value of its outstanding stock is owned directly or indirectly (including, in the case of an individual, stock owned by members of his family as defined in section 544(a)(2)), outstanding at any time during such year do not exceed $5,000 in principal amount;"End quoteMy first followup question:It's my understanding that I need not be concerned about the impact of the Safe Act and licensing requirements if I'm using just my money to loan to others, and that I have a broker creating the loan documents.

The higher price asked by the seller is a business value derived.

They are useful for quick screening, but far less so for purchase decisions.Ray Alcorn has an article on deriving YOUR capitalization rate.

It will put you in the ballpark, but so will Zillow if you know how to look at comps and derive a basic value from the data.

You also want to be sure not to insure your rentals on a "personal lines" policy as you could potentially run into issues since anything you derive income from is considered a "business exposure" and they also carry a total pollution exclusion..