I'd worry more about validating your assumption that you can raise the rent from $500 to $600.

If you want to move forward, you can make informed assumptions about things like rent and expenses.  

If someone is tight on cash to close, I might even quote at negative discount points (which is just what it sounds like).Internet lenders, on the other hand, if you actually read the small print and the "Walk On Water" assumptions they make to arrive at that killer advertised/quoted interest rate....

Let's say there are 2 major projects (in my case, Barclay's Stadium and the new World Financial Centers are very close by), then I would use 3 projected appreciation rates to arrive at a future price.Let's say, conservative is 5%, normal is 7%, and optimistic is 9% over a 10 year basis.Now I take my FMV determined by the calculation in 1) and carry that forwards for each 10 year projections:So the 10 year pro forma tells me my $2.4 Million Investment will be worth either a Conservative $3.9 Million, a Normal $4.7 Million or an Optimistic $5.7 Million.I will tell you that even my most optimistic assumptions have been way too low.I generally use the conservative projection in my Internal Rate Calculations.Anyway, this is actually a real example as I am planning on being in contract with a $2 Million property soon.I think for many of the Investors here, this is new math for them.

Ask them if they expect housing prices to drop, or just not go up as fast, and then challenge them on their assumptions. 

I think cash on cash return and assumptions can really change ROi, so when i compare projects it's always using 100% cash.

Many/most of your assumptions are incorrect.

Just to rub it in, here's another thing wrong with your assumptions: of the >$50k you'd be paying over the next 2 years (for PITI alone), only about $7.5k would come off the amount you still owe!

I've always operated under the assumption that research is extremely powerful and this makes you prepared to navigate through obstacles or reorient your "path" and be comfortable in doing so.

A lot of assumptions made here...