@Scott Weaner is right -- gather all your data and crunch it through the calculator.  

However, if I was crunching the #s today, it wouldn't meet my 2% target for rent to unit cost, so I probably wouldn't buy the house again!

I am just crunching numbers right now and things do not seem to work out.

(I am always willing to crunch the numbers) But you are correct, quite likely it would be crazy to accept such terms.He has been advised prime plus 1 - 1.5% as a rate, but that lender will do a 75% LTV on the lower of either the existing real estate value, or the replacement cost. 

I will get back to crunching numbers and account for potential appreciation, depreciation, and tax deductions.  

Thanks for the advice guys.Jon,It needs about $20k and I wanted to take a month off work to complete this rehab.I have crunched the numbers and it made a lot of sense to me.I just needed advice from seasoned professionals.Don I love your idea.....

i'm going to go crunch some number now...

it takes networking, marketing, number crunching and learning how to do all that stuff and more, before you can actually do it.reading back posts will help.

I'm writing usually letters to property owners, looking at property online, or in excel crunching numbers. 

Contact multiple lending agencies and find out your options once you have that information start crunching the numbers, you can use the BP calculators which are great.