There are abandoned warehouses nearby and there is a plan already to turn one into a brewery, so I think the value of the area will continue to increase over the next few years. 

This also means that with a larger down payment, the monthly debt service is less, thus increasing cash flow.

Now that you know how to calculate the current value or potential purchase price on the property...let's talk about determining ARV on this asset. 1) Do a complete rent comp analysis to determine if there is room to push the rents higher2) If there is room to increase rents...then you can start to determine what the value of the property would be after increasing the rents. 3) This will then allow you to back track to determine how much you would be willing to spend per door on CapEx improvements to achieve the rent premium.

If you were to purchase a much larger building, you could almost certainly increase your return on equity.

As i stated earlier, I would be conservative and increase your vacancy to 8% unless you already have a wait list of tenants.

If the deal finder were to receive equity in the deal, it would be a maximum of 20% (15% is more likely).That said, if you are interning for this experience investor, a salary is also another option.The increase in your compensation will be in the experienced investors' control.

Increasing bathrooms, refinishing whole house woodwork, updating all mechanical items, and adding those modern touches throughout.

With those increases (a total increase of 14%) that wipes away $343 of your projected cashflow and puts you into negative cashflow post-refinance.

What would be a good exit strategy knowing that the HELOC payment would increase substantially once the interest only period ends?

Unit A- Originally rented at $825-> Increased to $900.Unit B-Originally rented at $750-> Increased to $1,000.