If I find a property in a strong market that makes $100 a month, put $15,000 into it to add value, hold for 3 years and sell for a $40,000 profit my total gain during that time is $42,400 not taking loan paydown, tax benefits and other potential income into account.If I find a rural property or a property in an smaller metro area that makes $250 a month, invest the same in repairs, hold for 3 years and only sell for a gain of $15,000 my total gain is only $21,000. 

@Sarah Buchanan with the given details, my initial reaction would be to take the square footage discrepancy, as well as the cost to repair the flooding issue and revise your offer.

The note about AC repair in 2 years is somewhat concerning.  

But say you use it all as the down payment, then you suddenly have a 10k repair that you need (roof broke, hot water heater failed, and HVAC broke all at the same time).

@Sandy ScialesThat's what wholesaling is - buying damaged properties deeply enough that a rehabber can purchase from you, do the repairs, and make their own profit when they sell.What you need to know before you go is the ARV (after it's repaired value).

You will need to account for the vacancy (1/12 month 8.33%), repairs (these are short-term items and it sounds like you have already done some of the work yourself - assume 5% of rental rate $130), property management (assume 10% $260), cap x (assume 5% - $130). 

I would not mention anything about repairs in the reply just that it has been added and I would send them a copy of the updated walk through.At least this will challenge them to ask specifically for it to be repaired.

Make the repairs using a hard money loan.

Is 65% x arv - repairs, a good estimate to value a a multifamily rental property ? 

Is 65% x arv - repairs, a good estimate to value a a multifamily rental property ?