If you are just entering at the $245K price point plus your renovation costs this is a bad deal.The appraisal will never come back as high as you are predicting.

Obviously it is difficult to predict, but I am real estate newbie in that sense.Ideally, I could buy something in the $300,000-$400,000 range today in a high volume vacation area (which I assume means no trouble finding summer renters) which in 10 to 20 years, I could likely sell for a 75-100% increase in property value.This is my first one, so I apologize if it sounds dumb.

My slightly over $500,000 purchase in 2008 (everybody was predicting an immediate crash} has a comparable just sell for $900,000 and a lesser comp on the market for $890,000.

I still own several rentals which are upside down--I failed to predict the real estate crash, but even though they are upside down they are still slightly cash flow positive and they are less upside down then they were 3 years ago.

At least from my perspective, (fixed-rate) mortgages are pretty predictable in terms of cash flow, so it's not hard to do the math assuming none and then subtract out mortgage payments later if applicable.4.

having partaken in my share of this strategy.. difference was I was the HML putting the investor into title.. we just call it rate term refi... that model died a humungous death in oct of 2008... to only be revived about 2 years ago. and now you have lenders putting 75 to 80% debt on low value rentals all over again.and I predict in 3 to 5 years there will be another wave of foreclosures as burnt out landlord symptoms take root... what was really great for the industry and economy was the 2008 to 2012  were so much was being bought for cash... if folks start ripping cash out again.. you now take a asset that could never be foreclosed on and now it can be.. so law of averages.

Also the steadiness makes it easier to  predict.  

. :)PS: Do not take the title of this post to mean that past performance predicts future performance.

After all predictable monthly expenses are accounted for there would be a net cash flow of around $140/month (LPMI mortgage, HOA, etc etc = roughly $1,660/month) if the unit was rented on Day 1 at the average current rental rate.  

But now lm confused as to the predictions of a market correction.