I predict they offer to settle with him for $3500.00.

In commercial property it can be an educated guess becuase the value is based on the cash flow.However the value of SFHs is much harder to predict because a homeowners desire to live in a particular area can drive the prices up well beyond what makes sense from a cash flow perspective.My point is that yes you can use IRR to ehlp calculate the total return from both cahs flow and appreciation but it is as much an academic expercise as it is a practical too for SFHs.

No one can predict the future.Example: back in the day, having wood floors was embarrassing because you couldn't afford carpeting. 

I have another question though:When determining a rental property, I am predicting 10% of the rent for vacancy and 5% for repairs depending on the condition of the house.

Many are predicting a return to a more normalized market vs crash. 

More on that subject, with respect to your projections, what percentage of that projected IRR is due to reversion value (which is obviously fairly tough to predict 5 years out)?

It was built in less than 10 years ago, is already fully occupied, and has NO major repairs needed in the near future (nothing can be predicted, but the condition of this house is 1000% better than most duplexs in my price range/area ).

You always want to pay for actual performance, not someone's rosy predictions of the future.  

I was only thinking 'reputation risk'.As 'not a lawyer' I don't see you predicting or guaranteeing anything, I'm not sure how reporting facts and opinions would expose you.  

Does anyone care to predict.