It's for one deal at a time, and it includes projections into the future based on different assumptions that you can tweak.

@Andrew UMphrey I might be late to the party but I agree with 18% if all the assumptions are correct. 

@Olivier Mader the assumption on tax reform seems premature, the bill hasn't been confirmed yet in its final state. 

The 3% bumps I would just discount with a 3% inflation assumption.

I am not one to make assumptions, but I would think this kind of law is applicable to landlords just about everywhere.

You have made some assumptions.

------------------------------------------------------------------------------------------------------------Assumptions:1) Purchase Price (PP): $150,000   (just over 70% ARV Rule)2) Financing: Interest-Only Loan - All Project Costs3) ARV: $300,0004) Rehab Cost: $65,0005) Fixed Costs: $52,284  (17.41% of ARV)Buying Costs: $5,951  -  (4.0% of PP, or 1.98% of ARV)Inspection: $400Settlement Charge: $900[Transfer/Recordation Tax: $3,675][Government Recording Charge: $60]Survey: $195Owner's Title Policy: $721Holding Costs: $11,148  -  (3.7% of ARV)Assuming 8-Month Hold PeriodLoan Payments: $6,532Property Taxes: $1,896Utilities: $1,600Insurance: $720Maintenance: $400Selling Costs: $35,185  -  (11.73% of ARV)6% Commissions: $18,000Home Warranty: $400Settlement Charge: $425[3% Seller Concession (standard for area): $9,000][Transfer/Recordation Tax: $7,200][Government Recording Charge: $60]Termite Report: $1006) Total Costs:  $117,2847) Profit:  $32,7168) ROI:  ~14%  (21% Annually)Not very attractive in my opinion

I’m looking to confirm/correct some of my assumptions.

He told me he gives this building a 10% vacancy assumption and was unaware of the shape of several of the units (vacancy more like 20%).Based on the loan history I can surmise that the owners have a lot of equity in the building after having owned it for 20-25 years, but they are not property managers in the least bit.

I know for a fact they don't want to deal with this property anymore, but they also have very unrealistic value assumptions.