There is a lot of red tape involved with NACA.

The involvement of onsite management, often seen as a potential red flag, can lead to the property failing crucial qualification tests.

So, if you buy a house for 50k and turn around and want to borrow 100k the next day that is a red flag.

If they directed me to a site that had no new information and they never followed up with additional information; it was a red flag for me.

If they are on a month-to-month contract then you can give them 30 days notice of termination or to sign a new agreement.There are some major red flags.

Living in a red state has its perks :) 

Most of the time it's a scenario where they take a photo (And mark it with a red box in the actual report) of a quarter sized hole on the siding of the house and make a request like "Structural engineer needed for further inspection" lol.

@Lenza McElrath        Generally speaking if ANYONE will not be transparent about the income that a property generates, that is a red flag.

The OP is currently exploring conventional rehab loans (presumably 203k or similar) which would indicate that he is intending to owner occupy, and therefore hard money loans are likely off the table (as most HMLs are not NMLS licensed and don't make owner occupant loans).That said, to the OP, if you're looking at a conventional rehab loan you're just going to have to accept higher costs, less flexibility, and more red tape.

People are generally referring to this type of entry as contra-expense or atleast that's how I interpreted.In the PA tax return, this line item was highlighted in Red and hence the question