I'm curious to know why you assume 10% for repairs/capex when you're also assuming a $5K rehab initially?

Your initial post was pretty dramatic. 

Account ClosedThank you for the advice I will check out at least 3 meetings.I think I left out in my initial post that my profession is construction and I already have a large network of subs and can estimate the costs of rehabs.  

And it can work both ways, for example in some cases the BPO is inaccurate and the property is worth even more than the bank initially thought.

If the risk of a lender initiating its DOS clause and is of paramount concern in a Sub 2 then there are other methods to mitigate this risk.I've bought property using a land contract of sale, that in itself has a lot of similar risks of a Sub 2 transaction remaining unrecorded, and have been researching Sub 2 transactions.

Give Ben Leybovich's blog post here a read, but even more so, read Brian Burkes comments on the blog.Your CAPEx reserve is not an operating expense, it is a reserve and is deducted from NOI.Instead of looking for a specific CAP rate which will get you in trouble, you should be carrying out a discounted cash flow analysis over your {initial} hold period and determine the IRR or MIRR ... use these to anchor your underwriting, then look at things like Cash-on-Cash return to help determine the composition (some might say, quality) of the return.Frank Gallnelli's "What Every Real Estate Investor Needs to Know About Cash Flow" is a good primer to get you started.  

Initially you will get credit cards through your company and you just have to work.  

Well, you pay off those initial, multiple LOC and still have $100K left over.

For this reason i might adjust my initial plans on rental revenue.You guys might ask why not gey a loan from a bank.

For example:ARV on subject property is 100kTo fully take advantage of Cash out Refi.All costs associated with property should come under 70k to recoup initial equity.