I expect you will need a permit and not be issued one. 

Approaching it like that would also automatically set an expectation for the owner to pay maintenance expenses. 

Investors that close on a property and just hand it off to their PM without any oversight many times doesn't yield the expected result.

Most lenders are going to want to see a few big things from the ownership group. 1) The borrower will be the enitity (LLC, S-Corp, etc) and any owner with usually 20% or more of ownership in the entity will be expected to guaranty the loan, 2) We'll want to see some experience doing similar projects from at least one of the main owners, 3) We'll want to see bank statements showing liquidity enough to cover the intial cash injection (down payment), the closing cost, and some cash in reserve.

The definition of insanity is to do something over and over and expect different results.

@Joy McQuearyRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

My expectation is that they won't pay it, or ignore it altogether.Lastly, if they are actually able to prove your home was in such bad condition that it was uninhabitable, they may have a leg to stand on for early termination/abandonment.

Are you essentially saying the expected higher interest rate is the main issue with the strategy?

I wouldn't want to be doing a new BTR deal right now and ReFi at a 7-8% rate, unless of course it penciled.When subbing out to other contractors, you can expect to pay 20-40% more than it would cost you to manage/do the work, so make sure you bake that into your model as well.

But it's going to take a while, which I was expecting anyway.