The only time that expense/profit number should significantly change is if 1) They take too long (see A), 2) They do work outside the original scope (see A), 3) the original underwriting made bad assumptions about costs/profits, or 4) some act of god changes your exit.

Im making some general assumptions here that you have an LLC setup etc.

But the upside is, the more you underwrite and think about these things, ideally with some real world experiences behind it to confirm your assumptions, the faster it will go next round.

My advice is to speak to a few local HMLs and ask them for their rehab estimate spreadsheet, which most should be happy to provide.FWIW, based on my assumptions above, you can’t pay more than around $480k for this property.

Such an arrangement could be modest, ranging from 1% to 5% for the seller, and would only come into effect in the future upon the sale of the property.Sellers will likely have concerns regarding the assumption of liability.

If you keep on this path of fear based assumptive emotional decision making, it's gonna burn ya.

Deals like you describe are typically aimed at newbies that don't know anything about reality.Often, you're being sold a Class C or D property that's using Class A or B numbers.You don't find out until after you buy these properties that: The tenants aren't performingThere's a lot of deferred maintenanceTenants are trashing the propertiesThe tenant pool is NOT what you thoughtRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

@Kevin RockRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

I see many on these forums assume that a Class C or D property will have the same assumptions as an A or B.  

My assumption is you are in overages on renovations which may need to be drastically cut back.