I get it...I get emotional with properties and buy into the sunk cost fallacy too.

To be brutally honest i don't care if it's at cost, below or above, I only care what it is exactly and how much. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Given that the property was worth $390K in its current condition, I saw an opportunity to make the numbers work while keeping my upfront costs low.Instead of increasing my cash offer, I negotiated a $25K down payment with the seller carrying the balance for two years through owner financing.

In one of my markets assessments are performed every 3 years, and the cost of 3rd party appeals will cost 30% of 1 year savings. 

Extra 4 months of carrying costs are up most of the margin.

The instruments needed for the transaction will be state specific which means you should have someone from California chime in with resources who can provide low cost documents (as these will be boiler plate).

If any costs go up, developer eats it.

As someone else mentioned, insurance here is generally less costly than in Florida and other beach markets. 

You could convert them to a DSCR loan but then transfer them to a LLCWhat we have done is save for down payments and renovation costs, - buy properties that need work rehab them and then refinance them out making sure it meets our dti.