Here are a few to watch out for:Property Condition: Most distressed properties need extensive repairs or renovations, which add to your initial investment.Competitive Market: With Phoenix's popularity among investors, competition for the best deals can be intense.Complex Deals: Foreclosures, auctions, or short sales are much more complicated compared to regular real estate transactions and usually require specialized knowledge.Tips to Successfully Navigate the MarketDo Your Research: Understand the local market conditions, including neighborhood trends, property values, and potential rental income.Build a Strong Network: Work with professionals who specialize in distressed properties-such as brokers, contractors, and legal experts-to make the best decisions.Assess Costs Carefully: Factor in the cost of repairs, holding costs, and any potential financing issues when evaluating a property’s profitability.Be Patient: Finding the right distressed property takes time.

This can be very expensive and is usually the worst choice because you can't justify the cost.2.

It costs the same amount to replace a roof or furnace whether the house is worth $300k or $30k (assuming a similar size).

Quote from @Jeff Sanders: Personally coming from an agent/investor in CA, I always get a quote from a broker of mine and make sure I am knowledgeable with the fees/costs.

Trying to get a # from him about estimated remaining cost but got nothing.   

Please see the rough numbers below :Tear down house price 350k,Construction cost 165 sqft * 2 build=627k Darnell, did you get your questions answered?

Does a cost seg or bonus depreciation actually help you in any way? 

If you have a good FICO, a decent down payment and closing costs, go ahead an do the first one. 

The cleaning costs alone were over $9k.

At the end of the day; you need more money to do something like this.MAX LTV on new builds is 80% LTC, Meaning if the build is $550,000 and Land is XAdd ($550,000 + x ) * .8 = LOAN AMOUNTYou would need to come in with MINIMUM 20% of the cost in addition to closing costs and reserves, $80,000 is not going to cut it for this project.