This is because traditional banks/lenders are going to go off the income you report to the IRS, which especially for small business is typically really low after expenses/write-offs (investors often run into these issues as well after investment property write-offs).

People can blow through a 15k rehab budget pretty quickly without even accounting for structural issues or any big system replacements. 

@Justin KlepferThe drug issue will vary from area to area.

If the mother says anything, you can just reply that you will address the issue per the remedies stated in the contract.

If you meet a tenant - ask them how much the gas bill is, ask them if they have issues with the place, they'll let you know about how the landlord didn't fix X, Y, Z. 

Is this an issue with owning rental real estate and looking to deduct the interest on those rental properties?  

Is this an issue with owning rental real estate and looking to deduct the interest on those rental properties?  

Some industries are looked at as high risk and banks won't touch." and since I want to establish business credit and financing for my next flip, this could be an issue. 

Don't waste time painting it, maintenance issue later. 

To illustrate this better, lets say the house would be worth 170k IF the foundation had no issues.