Hey @Marissa Mallamo - Good question :) So, the ARV is not really used in the calculation, but can be useful for estimating the future appreciation potential.

And, no one can truly comment on the deal without a rehab $ estimate.

Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbookConsider checking out HUD homes for small multi's owner occupied gets first crack.

Consider that the developer is combining my small 1 acre parcel with an adjoining 35 acres, and I estimate that his company will net between 7 and 9 million bucks after a few years' work and the sale of all residential lots in this project.

I am not a house flipping investor but a GREAT place to start would be by purchasing "The book on Flipping Houses" as well as "The book on estimating rehab costs" ..

Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbookConsider checking out HUD homes for small multi's owner occupied gets first crack.

Hi Scott,There isn't a whole lot of information to work with in your post without knowing where the home is located (to see if your rent estimate is good), whether the maintenance cost is reasonable given the age/condition of house, etc.The two main questions I'd have on the info you did provide are whether you're accounting for vacancy, utilities, and property management costs, even if you're initially expecting to self-manage.Regards,Mike

I reviewed the pictures, had an inspection done, estimated rehab costs and then made an offer.

Careful with those neighbor hood estimated...

Hi BP members,I found a burned down house (big hole on the roof, broken windows, and it has been abandoned for a year or longer according to the neighbor) and surprisingly, someone mowed the lawn because it looked neat.I estimated the ARV around $110K to 120K.