A 20% down payment will allow you to have a positive cash flow, even using conservative projections and a property management company.

Your wife as conservator/guardian has an obligation to her mother and selling the property to herself creates a conflict of interest in that she stands to benefit as the buyer and is also making decisions for someone else as the seller.2.

In 1997, I don't fully understand why, the City of Denver paid the golf course owners $2mil to rezone this parcel as a "conservation easement" this was extremely restrictive zoning and meant it would essentially be destined to be a golf course for eternity 3.

This in turn will kill your exit strategy if you are not doing your due diligence and playing conservative.

I am hoping this number is extremely conservative given that our contractors, inspector, and realtor walked it as well. 

So for example I'm very conservative and don't want any debt on them because I feel this hardens them in case of a severe recession.

If that is all ok then get a very good local realtor to run comps in that area to determine the conservative value of the home once you've completed the renovation work(ARV).

And your central point I think, is to use conservative numbers so the deal still makes sense even in the worst case scenario.

Thanks Dennis, I think you're right that planning for a more conservative return would be a good idea.I re-ran my numbers at an even more conservative level:Lower ARV: $800,000Lower income levels (I'm assuming it will take a couple years to get up to full potential income, but giving myself 3 years was a conservative estimate):Year 1: 50k (NOI $1,000)Year 2: 80k (NOI $31,000)Year 3: 100k (NOI $51,000)My ROI numbers come out to:1% (year 1) 46% (year 2) 76% (year 3)This scenario seems like an acceptable risk to me, when the upside seems far more profitable.

Be conservative on your rehab budget, rehab timeline, holding costs, etc.