Hard to really know what would work best and what people have used.

I'm having a hard time wrapping my head around how to actually make this happen in today's world. 

@Rachel Thomasson It’s very hard to find great prices in great locations.

Also, if this is something that you are looking for in a hard money lender, you might want to look into more of a private money lending model verse anything else. 

I see too many investors now, put a significant amount of money in rehab costs and over leverage themselves on hard money loans with low down payments, their properties are not selling and they are lucky to just payoff their current hard money loan via a DSCR refinance. 

This property was in terrible condition, however will a little vision and hard work it paid off.

I have friends who are hard money lenders, and the rates were a no for me as a first time RE investor.

for movement or settling, 4) Maybe most important because it's so hard to correct...the grading at and around the house.

Quote from @Jaycee Greene: A few things I noticed, in addition to having the tenant pay the utilities are:1) Incorporate annual increases in rent higher than 2% (in your area, maybe 4%-5%) with a slightly smaller increase in operating expenses (say 2%-3%)2) With a gut rehab, I'm not sure why you need to spend $128/month on cap ex, at least for the first year or 2.3a) An 80% cash out refi is probably going to be hard to get.

We’re at or near record low foreclosures, you’re farming a hard row.