Now that you know how to calculate the current value or potential purchase price on the property...let's talk about determining ARV on this asset. 1) Do a complete rent comp analysis to determine if there is room to push the rents higher2) If there is room to increase rents...then you can start to determine what the value of the property would be after increasing the rents. 3) This will then allow you to back track to determine how much you would be willing to spend per door on CapEx improvements to achieve the rent premium.

If you were to purchase a much larger building, you could almost certainly increase your return on equity.

As i stated earlier, I would be conservative and increase your vacancy to 8% unless you already have a wait list of tenants.

If the deal finder were to receive equity in the deal, it would be a maximum of 20% (15% is more likely).That said, if you are interning for this experience investor, a salary is also another option.The increase in your compensation will be in the experienced investors' control.

Increasing bathrooms, refinishing whole house woodwork, updating all mechanical items, and adding those modern touches throughout.

I’ve been thinking that I should start out with SFR bc they’re cheaper, but I’m not 100% confident about that.

Our LTV is less than 50% ( yes no risk at all for the bank, and we have top credit score.We already paid the appraisal, environment fee, wasted countless hours etc...The texts in LOI: Financial covenants:-- Min DCR based on actual rents for the first trust deed of 1.25:1.00 based on a 25 year amortization by the end of 2018.And in the loan doc---Property is to maintain a 1.25:1.00 Debt Service Coverage Ratio, tested annually.We would not have paid the fee and sign the LOI, had he included the phrase tested annually.Please understand that the loan  will be for 10 years long, and we are very confident that we will always have fund for the monthly mortgage payment.

With those increases (a total increase of 14%) that wipes away $343 of your projected cashflow and puts you into negative cashflow post-refinance.

What would be a good exit strategy knowing that the HELOC payment would increase substantially once the interest only period ends?

Unit A- Originally rented at $825-> Increased to $900.Unit B-Originally rented at $750-> Increased to $1,000.