Even if I know what rents I'm going to get I still need to estimate the cap rate to determine the value, cap rate is based on purchase so how does that equation work?

I think a privacy fence along that edge would mentally maybe make a difference.  

It will be critical to determine if they intend to include an "amortization" clause, which will require existing STRs to come into compliance (or seek to exist) within a certain time frame.

@Marilynne Poumele-FloresCongratulations and making the mental shift to creating wealth in the real estate space.

Swetha - Seems like one of the most important aspects is clarifying how you are determining the ARV.

@Morgan Painter  To answer your question, the first step would be to review the income and expenses to determine the NOI, and compare the asking price to the market capitalization rate for the area.  

Start by determining what you want to buy and where. 

You can just reach out to them and determine which one fits your needs the best.

I would follow up to get pre-approved and determine how much you qualify for.

The owner is willing to carry the property while I do the repairs, when we sell he would then collect his $250k( the original value we determined I would pay) plus a small percentage of profit (yet to be determined).