Asking price: $365,000ARV: $540000 (10% discount)After Repair Value (ARV):540000City Evaluation419,100Cost of Property:365,000Estimated Repair Cost:135-165k (50% more)Cost contingency (8%):14400 - 17600 (doubled)Total Gross Profit Marginnegative $7600 - $25600 unless you have a track record of success to offset i would start with way less rosey numbers and then adjust from there. on reviewing your numbers it seems very optimistic without much room for error. 

You might want to scale back your 401k contributions and put it on the CC debt at least since it will be very optimistic to think you can match double digit rates of return in the market for much longer.

  $75/sf sounds optimistic if you're planning to bring in a builder -- I would expect at least $80-90/sf. 

That's only the P&I part of the payment, taxes and insurance are in expenses.If you're self managing you can earn the PM's cut, which is roughly a third of the 50% that goes to expenses, capital and vacancy.The danger with slicing this onion too thin is that you're tempted to shave a little off here and a little off there and you end up at an unrealistically optimistic evaluation. 

However, it assumes only 3 months for holding, which is seriously aggressive in some markets just for the sale, and ridiculously optimistic for a newbie and includes absolutely NO contingency for surprises in the rehab.You must...1. 

@Leigh C - I was just going to post something about the percentages that the OP had - expecting 1 in 5 is overly optimistic, but you did say it more bluntly :)

Should I be assuming this, am i being to optimistic or to pessimistic?

Some people are optimistic and think they are going to live for a few more decades.

I'm an optimist, lol.

The message is more, "don't be overly optimistic about what rents you can get."