If I used the 50% rule, and placed my rent in the middle of the range, this prop would be solvent but have minimum cash flow.

The 50% rule is the formula most used to initially assess a property to see if it is cash flow positive or not.

Without a contract price to go off of apprasiers are encouraged to come in low based on the rules they go by, especially in an improving market.

I am looking for properties which meet the 70% rule in any area where properties are selling in less than 90 days.Realtors have been helpful when they have off market deals, and wholesalers sometimes have good deals.

What you seem to be considering is a short term purchase/financing arrangement (lease-option) for long term asset needs (buy-hold) which violates the first golden rule of financing assets, you need a long term financing arrangement to acquire for long term assets.Another point, with rates so low, they will be higher in 3-5 years.

By cash flowing $100-$150/door I'm talking about after all expenses and reserves allocated for CAPEX (50% rule)Example: $1000/mo gross rent$500/mo (50%) exepenses/capex reservesMortgage of $300-400 for P&I leaves a true cashflow of $100-$200/mo

I did the analysis of rents in the area with for really cheap is 650$ but based on my 2% rule you can get away with 120$ in rent and make money also keeping in mind the 50% rule.

I figured I could possibly convert the upstairs 2 bdrm into a 3bdrm (1800 sq ft should allow for 3 bdrms), and the downstairs into a couple of 1,500 sq ft 3 bdrm units - provided the layout works.Im just wondering if anybody knows more about multi-use zoning rules and/or what my chances might be to pull something like this off.

Rules apparently changed 12/18/12.

I'd just use the 50% rule (50% of gross rents go toward expenses, capital and vacancy).