So ya he's going to lose his house and everything else I bet.

Now you calculate those risks.

If it hits my initial monthly GRM calculation then I will take the numbers and crunch them through an actual income/expense statement.

take these #'s for exampleARV=200KPurchase price of home = 100KAfter figuring all of the soft, closing, title, taxes, insurance, points paid, Interest for 1 year and the draw interest...I calculated that you would have around 17K to work with in rehabing the home within the loan and you may have to come out of pocket to finish it.... and you haven't even paid the sell side closing costs and broker fee.Just my $.02

A few times a year I'll call one or two of them, give them my numbers then sit and chuckle (to myself) as they hem and haw and try to figure out how to use their calculator and come up with a price.BTW, I've been a RE investor for close to 30 years, I've bought a few seconds (desperate sellers who needed the money to put up their noses) and a couple of firsts.

Perhaps a strat. of buy, hold and sell is the best bet.

So if you are calculating an ARV on a house in that area with the $200/ft factor, then you are not accurately factoring your ARV.

I have no idea what building a bathroom inside the structure will cost but I'll bet it's going to run $10-$15k.

Your best bet is a hard money lender, and if you don't even have atleast the upfront fees (usually about 5-6%) then the HML probably won't feel comfortable with it.Third, when you say you figure it will sell for 70K or 90K, what are you basing that off of?

Your best bet for determining a true CMA (comparable market analysis) is to use a trained pro.