For instance, in your example (btw, we have had multiple occasions where this happens in the past few years) if you paid $200,000 for the house, put $40,000 into reno, and then closing costs, commissions, etc. were $15,000 you would simply add all this up and that is your basis in the property.

Second, list price is not a benchmark for a good deal, you are hung up on beating up the seller and if you are not achieving a win-lose scenario, you walk away.

I'd definitely recommend not going with an LLC in CA simply due to the franchise tax and the admin burden here.

I had enough to cover it, and the deal ended up being a great win overall. 

You can also use FHA with 3.5% down as well although may be harder to win in a more competitive market.

It's understandable why many investors and/or accidental landlords would opt to simply self-manage.

I don't know the cost of your fridge, but my CPA would simply expense it.The funny story is a rehabbed a house, bought appliances in a refrigerator, hot water tank and depreciated the entire rehab over 27.5 years.  

There is simply way to many things that can go wrong building a new home with zero experience.

You simply have no credibility otherwise :) 

This is simply the reality of the paradigm we are living in today.