> Military husband/wife buy new home, divorce, stop paying note and hoa> Husband is erroneously removed from title by tax appraiser, HOA forecloses on wife, I buy home at auction> Now I am on title, wife and husband on note, bank cannot foreclose because husband is protected by SCRA > (more on this in the above post, but husband does not want the house back)A while after moving in I discovered water damage inside a wall where rain has been getting in due to needing a new roof. 

So, if you buy a SEVERELY distressed property in a cheap market for $20k, invest $20k to rehab the property and it appraises for $80k, you can refinance out $60k (75% LTV) and have MORE money back in your pocket than you started with.

No different than an appraisal.

Not because it might be mispriced, or the area isn't seeing that much demand anymore, or any other reason - but because that will come into play when the bank does an appraisal on your property. 

On a Hard Money Loan you can close pretty fast 7-14 days without an appraisal versus 30 days on a regular loan.

amortized 2@10yr, 8@15yr, 8@20yr                   - avg cashflow $320/ home                   -2 homes no loan        -2.1m Appraised value, 1.1m borrowed on above loans.

Now, an active income could be in the real estate space too, such as flipping properties, working as a real estate agent, appraising, lending, among other things.

The lease has to be supported by rent schedule on appraisal, and not a lot of million dollar properties are going to pencil out even with the larger down payment requirements, but it could.

You could get an appraisal report before closing to secure your position.You would want to be in a first-lien position to foreclose and get paid first.

We then spent around $30,000 out of pocket on renovations, including repairing the roof, upgrading the electric panel, installing new HVAC, and putting in a new kitchen.After completing the work, we refinanced with LendingOne using a 30-year fixed-rate DSCR product at around 7%, which resulted in a net cash-out of approximately $15,000.A couple of things to note:I'm out of pocket on this property for around $40,000 ($25k down, $30k rehab, minus $15k recaptured).I'm thrilled with this amount since it's far less than our "normal" 25% down strategy would require based on the higher value.The property appraised for $330,000 after the renovations.The key point for me is that this property is now netting around $800/month in cash flow.