@Kirpal Toor - Just wanted to chime in here really quick, I think Greg nailed it above that there are many different types of service models in the industry.

In my opinion, they are treating  houses in lower cost neighborhoods like medium to high end flips, but selling to investors, which I don't believe is a viable business model. 

It is franchise model right ?

The model worked well for about 6 months and so on but went south after the strike and there were lot of cancellations and schedule changes so he eventually decided to terminate his lease.

AVM models like House Canary and the Zillow Zestimate should be used very carefully. 

In my underwriting model, I would have to stretch every assumption to the most ridiculous breaking point in order to come up with a 10% CoC return even on a distressed asset. 

.- 3% rent growth and 3% HPA is being modeled in most markets.- Most current rates are in the 7-7.75% range.- Competitive pressure to deploy capital compressing dropping of rates. - Buyers are underwriting portfolios to as-is rents.- Machine learning models are helping to reduce risks.- Reverse migration to Rust Belt is occurring based on affordability issues elsewhere.- Scatter site is a defensive asset offering a lot of optionality.- Market conditions are challenging for scatter site hold unless you are underwriting a 10-year hold.- Setting up operations for SFR from scratch is very difficult.- One investor is buying at cap rates in 5s or 6s.

Are they just a remodeling company with a different sales model?

Is it a good idea to base an entire business model around something that breaks the law?

I'm sure there is a creative workaround but the trouble I am finding with BRRRR model is the Refinancing part!!