I would also factor in rent increases, appreciation (even if it is small), and equity built on the studio.

Remember to factor in some unforseen issues with repairs (maybe 10% over)When you have determined the ARV and the estimated repairs, I would recommend that a "good deal" for a rehab project (fix up and resell) in an average market is 70% of ARV minus repairs.

They also don't ever mention closing costs or holding costs when factoring profit.I actually feel like some of the prices they pay for remodeling are high.

Make sure you purchase the property for a low enough price to adequately factor in ALL of your expenses, repairs, and profit.There are a couple money issues you will need to factor before buying a rehab.

Then as for talking to the seller, here's how I would approach him/her.When I call, I would first make a list of all the negative factors and all the positive factors.

It's not really the ideal property to do a condo conversion on, although it could be done.

Loans are a great way to leverage and acquire property.I tend to be pretty conservative when I deal with loans (Always 20% down at least) and always fixed.

As I understand it, the lender factors in projected rent receipts when looking at the additional cost?

Do people make real money at this on a consistent basis, after factoring in *all* dollar costs and time spent?

I deal with REO's and am very familiar with BPO's.