Sub 2 advice that I've received in the past is that as a general rule, if you plan to rent out, do not assume mortgages where the rate currently or could exceed 7% in the next 2-3 years because you then need to find a tenant willing to pay the extra on top in order to meet your spread.

So for example, if you're buying a $100K ARV property that needs $20K of work, then the 70% ARV  guideline says that the property is worth $50K to a cash buyer, which should mean that your spread will be the difference of $50K and what you go under contract for. 

@J Scott I don't know if you do any lease options, but if you do, what's a minimum spread you look for?

If you were to sell on a wrap without a broker, you might be able to squeeze out a profit, but would take some time to realize the margin spread, your interim costs might not get recaptured and this is all dependent on a buyer who performs on their end for some years. 

Have you own opinions and rules, but don't spread misinformation.As for the claws, the cat typically is going to claw up their furniture...and yeah, maybe your carpet.

I see the IRR as a metric of timed cash flows, including annual spreads, liquidity events, and profit taking, all of which are in some way driven by the quality of location, jobs, etc.Thus, when I say IRR, I mean all of the things that you mention.  

I offer a 12% return annually so I'm thinking that it will probably spread on its own but maybe it needs a push?

Play around with the Flip Analyzer tool and check the bigger pocket downloads for spread sheets that will help you understand all the potential items you need to evaluate for a project.

This is the government agency's determination not my bank New American Funding so I assume it will be wide spread with other banks as well.

This is the government agency's determination not my bank New American Funding so I assume it will be wide spread with other banks as well.