I think you've already had some pretty accurate review of the "50% rule of thumb", I personally use it as a quick check of "do I even need to bother" and to keep me from shaving some expenses here and there to justify the deal.For the down payment I like to use Cash on Cash return, that gives you a % that your actual cash in the deal is earning.

If I pro-rate the electrical and plumbing work to just that needed to finish the basement and not include the new HVAC, we are left with creation of three rooms (each with an egress window), a 4-piece bath, a laundry area and a kitchette (both with new appliances) for about 14K (about $22/ft^2) This includes applying 2.5" of closed cell spray foam insulation to all the exterior walls and levelling of the existing concrete pad, before installing an insulated sub-floor.

I have stayed and played golf at Augusta, ( Ron Daniel COO of McKinsey was my host and is my business partners step dad) and his buddies travel in G 4 's.. Having

This would shave $140 off the $230 and still leave you only $90/month positive cash flow.To summarize: Your numbers, at best, give +$90/month.50% rule gives: +$56/month2% rule gives: 1.05% ((monthly gross rents / (purchase price + rehab)))You left out cap-ex.I would pass and find a better deal.Hope this helps.

I would suggest using someone local, as every town has their quirks and someone that knows the process of the area and has gone through their planning and building process helps shave off time.

I've seen a few thousand being shaved off from MLS properties after having an inspection, but nothing close to 25k on a 130k contract.

In regard to your point about comparing to past performance, do you mean the performance that previous owner(s) have experienced?

Only you can answer this b/c of your financesI have asked myself every one of these questions HOPING I could justify doing the same type of deal but so far the #'s have never worked due to the amount of equity needed and the terms/costs involved. 

I'm interested in having a polyurethane spray foam roof installed at one of my buildings.  

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