I would try breaking that apart and including it in the applicable expense category (PM, CAPEX, Repairs, Vacancy, etc.)Overall though, I wouldn't be too excited about this property.

You can deduct legal fees and repairs, but not lost rent.

@Daniel Winsor Just make sure the language regarding the roof repair being tied to your required performance are Clear, not vague.

Start with gross rents, then subtract vacancy, prop mngt, taxes, insurance, utilities, repairs, capital expeditures, etc.

(ARV x 0.7) – Repairs = Maximum Purchase PriceMe and partner are looking at an off-market townhouse that needs 150k of work and has an ARV $1,100,000. (1,100,000 x .7) - 150,000 = 620,000620k would be the max purchase price thenIt rents for 6.5k/month, property taxes are 10k/year---a decent 1%erI ran the numbers thru the rental property calculator with putting 20% down and get conservatively 10% CoCWe believe the property to be a good deal.

Most lenders don't consider an after repair value, and most appraisals don't list an after repair value, which makes me think you're not applying for a conventional loan.Did you already remove the appraisal and / or financing contingency before you got the appraisal back?

Even if you repair the foundation, you will have to disclose it to the end buyer, which can scare them away or reduce the value.

I just finished a flip and am working on another the first was 2 bed 1 bath, spent 30k in repairs.

Once i move out and rent both units the income will be $2300-2400 a month, leaving 400 for repairs, maintenance, vacancy, etc...  

I’m currently repairing my credit and studying up on different methods, so I don’t think this would be an option for me right now but I’d love to find out more to keep it as a potential option int he future.