We use financial models that calculate our gain on sale or REO or, additional lost against reserves already booked on REO.

my thoughts would be.. have 3 contractors come out and give you prices for re-modeling your own home. 

But... there are a lot of people flipping homes in the Phoenix area and I'm just not sure I'm aggressive enough to compete in a market like that.So what I'm mostly eying to start is the Buy-and-Hold model. 

As an accountant, I do not get why business owners/investors focus so much on the bookkeeping when their expertise is on investing.My typical month-end things I do as an accountant:Bank RecsAnalyze the GL (reclass, if necessary)Make sure Mortgage, Utilities, and Property Taxes are paidCredit Card ReconciliationsReview Income & Expense statementReview Cash balance (this is mostly every time checks are cut) to make sure there's enough for mortgageYear-end:Gathering all backup and documents for the tax accountant or auditorThis includes GL should be close to perfect.Review of Income Statements and Balance SheetsFiscal Year-end bank rec which should match the balance sheet's numbersPrepare 1099sPrepare any CAM reimbursements (commercial tenants properties)As for flipping - same concept, just making sure that the closing entries are done correctly.

I prefer a more conservative exit, particularly 5-10 years out.I typically review the stress test IRRs at varying exit caps and see if the asset will perform at more conservative exit caps (and many of these properties should be fine even at levels above +100 bps).I invest with a self storage operator who typically models exit caps that are 150 (sometimes 200) bps higher than current market cap rates...with an exit in six years; so, +25 bps per year rather than +10 bps. 

Of course it's slightly different business model with deposits and rent and equipment damage and such.

I know Steve Chader (he is from AZ), and admire his business model. 

Then when your attacks start, sit down, pull up your models, run through every scenario and see that your offer makes sense no matter what.

I'm not saying rehab is simple or easy, just that in comparison development is more risky, complex, and costly in terms of time and energy.One way of offsetting this development risk is to partner with a development company or hire a consultant who has the expertise and team to move through the development process more expediently. 2.

@kasum I would actually be curious your business model and why your buying the property.