Value add by reducing property taxes, property insurance, utility bills, and additional expenses with increasing rents etc. is a possibility.It's a very different form of value creation versus buying something that is already stabilized and most of the value is extracted from it already.In that case you have to be more conservative on the numbers as you are buying mostly the cash flow with little to no additional upside avenues.300 per unit upside spread per unit sounds good.

Go like 250k spread, seems like an addition to the house is needed.

I was rounded on for never even considering paying someone to move out, whilst the spineless landlords would pay out because it lessened their financial loss.Yet in this thread, every landlord is hard as nails "evict on the 6th", whereas I'll work with a tenant and most times get paid in full, rather than have a property empty for month after getting rid of a tenant that most of you would get rid of in a heartbeat.

They need a HUD approved appraisal and will do a short sale for 95% of the value.It seems that it really depends on what the spread is between the ARV and appraised value, and that could be different for different neighborhoods.

And they invest in hundreds of properties spread out across the nation, instead of just 10 in a single city.

It could currently rent for about 1600-1700 a month which is less than the 1% rule but would leave about a $300-$400 spread after paying mortagage.  

Going to full-time, should we set up a separate LLC for "running the business", or should we just continue to use those LLC's and their bank accounts for expenses and spread general expenses around?  

Depreciation means instead of claiming the entire expense in one year, it is spread across a depreciation period of several years.You should talk to a CPA.

With a 15% spread doesn't seem like there is much profit for the builder, is the builder in trouble?

I can start spreading the word to them.