The estimated ARV on 8% cap rate for this building is 1.4 million.

How did you come up with that estimate? 

Monthly Income:      Monthly Expenses:       Monthly Cash Flow:      Pro Forma Cap Rate:$1,550.00                     $2,248.06                       -$698.06                            2.35%     NOI                   Total Cash Needed      Cash on Cash ROI            Purchase Cap Rate$8,124.00                     $20,349.00                      -41.17%                            2.35%======Financial Projections========     Total Initial Equity: -$334,650.00     Gross Rent Multiplier: 18.55      Income-Expense Ratio (2% Rule): 0.44%     Typical Cap Rate: 2.35%      Debt Coverage Ratio: 0.49     ARV based on Cap Rate: $345,000.00=======50% Rule Cash Flow Estimates=======     Total Monthly Income: $1,550.00     x50% for Expenses: $775.00     Monthly Payment/Interest Payment: $1,375.06     Total Monthly Cash Flow using 50% Rule: -$600.06========Analysis Over Time==========Annual Growth Assumptions    3%                   2%                3.4%Expenses         Income       Property Value_______________________________________                                        Year 5Total Annual Income        $20,536Total Annual Expenses      $28,645Total Annual Cashflow      -$8,109Cash on Cash ROI             -39.85%Property Value                 $407,776Equity                              $111,347Loan Balance                   $296,429Total Profit if Sold            $49,939Annualized Total Return       28%

Either get better at estimating rehab costs or but better (with more discount at purchase) to provide a larger spread for these occurrences.

I want verification of sheathing quality, venting, along with repair estimates if needed with venting if I'm going to move forward with the deal.Much thanks.

I believe the best solution would be to classify the new purchase as investment, rather than primary, using Conventional financing, and request the lender to have the appraiser add on a 1007, wherein the appraiser provides an estimate for the long-term monthly rent.

Some of the estimates I've gotten are between 30-40k for the renovation so this could be pushing it.

It is difficult to estimate the repairs even before buying the property but you get better with experience and you can hire a contractor to help you in the beginning or get help from other investors.How did the 70% rule work for us in Sudbury:70% x $850,000 - $250,000 = $345,000 MAO (Maximum Allowable offer)Since the seller was asking for $325,000 we submitted an offer for that amount and got it accepted.Tip 1: Agents are a great source of deals for properties that need work.

Price will instead be dictated based on appraisal.To come up with the price however, come up with a ballpark estimated price.

The actual claim payments will be determined by the adjuster but you can estimate the reduction by dividing the ACV by the RC.