This is definitely something I will be keeping my eye on and maybe an opportunity will present itself.Thanks!

They also dont know that every market does not present the same opportunity.

To be sure, the present servicer can give the best guidance here.

HUD will accept any bid that is at least equal to or greater than the minimum acceptable net offer and presents the highest net to HUD."

By changing any of those, you then are required to update the code for the room, which would most likely add to your list the requirement to add a smoke detector, which may not already be present in the room if it is not a new home.Now, that is the RIGHT way to do the conversion. 

I was presented an opportunity tonight with a chance to buy what I think might be a good deal.

However, I would first present the argument about the PM failing to perform their end of the contract and plan to report them to license board if they hold $0.01 of the money owed.  

I know you know this, but you will need many more skills and subs than you present.

The reason I ask is if the loan is near market rate (versus the rates available 2.5 years ago) then a refi to extract sweat equity could make this more worth the effort, risk, cost. to be blunt, with the numbers as presented and without any extract of value (refinance), I am unconvinced that the smart move was not to re-rent in current condition for $1k.  

The advice that is presented by those that are writing the best-selling books are to do due diligence and that umbrella policies ALONE are not necessarily the way to go by themselves.