The LOI price is a function of a formula that's based on a discounted capitalized valuation.  

The ARV depends on what you bring the property up to, highest use, marketable, functional, competitive in the market and demand.

What is your utility function?  

The bedrooms and bathrooms were fine, but the kitchen was extremely small and not functional.  

@Ben Leybovich Apparently today I DIDN'T learn how to use the @ function on the first try.I did, however...-- Form and file my first LLC with the state with which to protect my business assets-- Attend an awesome church service with my amazing wife-- Coordinate with my realtor and mortgage lender regarding a deal we have under contract-- Establish which insurance company I will use for this deal-- Establish which local bank will be most advantageous to handle my business finances, and I will be going Tuesday afternoon to open my business accounts-- Finally decide which online payment processor to use with the LLCNot bad for an average, lazy Sunday. 

The rest is a function of your risk tolerance.

Is that function only on a true computer?

The industry has yet to mature to a point where accreditation reasonableness checks are done regularly and the technology is lagging behind what portal operators need to make things function properly.  

I don't try to estimate future appreciation because I would not be good at it.Your cash on cash is a function of the property performance and your financing. 

I've learned the hard way that getting a few extra years from a functioning hot water heater is not worth the damage they cause when they begin to leak.