I understand the Property Value, Equity, and Loan Balance figures and how they are arrived at.  

Do you have documentation of how the "reasonable" salary was arrived at?

If you wanna tell me to F off that's your prerogative... but the goal of my post was to help you understand that no one really cares how you arrived to your deal.

So if you start your analysis from the point of focusing on those two questions I think you'll arrive at the best conclusion for you.1.  

The big day arrived We were able to take out the shearing wall ,remove header and open room The steel structure was purchased by our welder on our crew and he also finished the welding on site.

While matching the cap rate to the listed price makes sense, I see the following issues and I'm trying to understand how do I provide an allowance for those to arrive at a price that matches the risk-to-reward ratio (if you get what i mean)1.

In my opinion, positive cash flow is often arrived at with what I like to call "perfect math".

I arrive at a price based on a specific profit I want to make, usually 20% on my total money invested, which includes cost of the home + rehab.  

Read the book he cites these types of examples and with practice you will easily arrive at a win / win.Good luck, Chip

Then look at the construction approach (lookup your area in the Marshal Swift construction reference and followthe type style costs) for that home less depreciation of the improvements, the reaminder will be the land value.In some areas, tax assessorslist land and improvements seperately, you can get an idea of valuations by looking at the assessments and the current market values as to the homes and arrive at a % difference, say finding that the market value in that area runs about 15 or 20% higher than the assessment and then apply that to the assessed land valuation, this will be a ball park assessment.Another way is to look at the total market value of comprable homes in the area.