I've calculated the lump sum costs to be $9,500 for buy and sell combined and a monthly reduction in cashflow of $347 due to the new loan and taxes.

These should be reflected in the purchase price or negotiated as part of the terms, such as the seller carrying some of the renovation burden.Use seller financing to your advantage by proposing a price closer to $225,000-$250,000 with terms such as 20% down, a low interest rate (4-5%), or interest-only payments for 3-5 years, with a balloon payment once renovations are complete and cash flow stabilizes.If the seller is firm on price, consider negotiating higher down payment terms to reduce the financed amount, paired with interest-only terms or a price reduction tied to renovation milestones.Key questions to address include the condition of the septic system, which can be a significant expense if it fails.

But if those payments feel like dead weight, Dave Ramsey’s “debt-free” mindset could be worth revisiting.Here’s a quick story to illustrate.

I enjoy college football, video games, and lifting weights. 

Reduction of all necessary life necessary social services by 50%.

There is tax reduction and appreciation to consider as well. 

I got a nice reduction by the way, since I was able to clearly explain what was going on.

@Eric Andersen definitely put weight into what @Michael Baum wrote and do your own research on the city regulation/zoning.

Beside investing their own cash on the same terms, the sponsors return should be heavily weighted toward “carry” (receiving the bulk of their return as sponsor in the form of an interest in the property rather than cash) with that carry subordinate to the investors receiving their investment returns PLUS a minimum annualized return.

If any of these do not pan out, the turnkey company feels the weight of assuming that risk.