The rate is an assumption but it's in the ballpark of what he thinks we can get.

Keep in mind this is projections only at this point, I have not invested in the area but will be next year:My assumptions areInsurance: $1,300/yr not including a separate flood ins policy.  

I used the sellers numbers for calculating income with the assumption of getting the house rent ready.

Principal and interest paymentPITI Annual: (23,675)Levered Free Cash Flow Annual: $22,174Cash flow per month: $1,847Cash flow per month per unit: $108In terms of initial Equity, with the assumption that we will be putting down ~$112,000 of equity into the property, and then also ~$23,000 of closing costs (Simply percentage assumption, have no idea what closing costs will entail :)) and about ~$50,000 of repairs (Also simply a percentage cost, do not have complete understanding of what will need to go into this, however it is close to Marcus assumption that you should assume around ~$3,000 of work per unit.)Equity Contribution: ~$112,000Closing Costs: ~$23,000Repairs: ~$50,000Total Cash Contribution into property: ~$185,000So from this assumption, we would have a year Cash on Cash return of about ~12%.I don't think that's bad at all.

Is anyone familiar with this market and could confirm my assumptions or offer any advice?

You said 7% is ok not great are using the assumption that 8% and up is good ?

Have a couple general contractors walk through and definitely get a home inspection -- once you're in contract.Here's an example based on the following assumptions: The ARV is 860k -- this is what the house would sell for once renovatedRenovations will cost you 50kYou'll sell the house within 6 monthsYou're going to resell the house using a realtor, paying 5% commissionIf you cash out the existing mortgage of 500k using a hard money loan at 2 points and 12%, and then asked the sellers to carry a junior lien of 125k at 7% interest, then if you offered 625k you'd profit about 85k.That's about a 10% profit of the ARV -- your criteria are up to you but I wouldn't go smaller than that.

Here are my assumptions:- You own a single family or a multi family investment and you are currently generating minimal cash flow.  

We can all make all the assumptions and calculations we care to about credit scores and such but it ultimately comes down to what the lender thinks.

That's a HUGE assumption but since you threw it in there after your first post...