In general higher cost neighborhoods are safer than lower cost neighborhoods.

Since you estimate a resale value of $200-215K and renovation costs of $60-70K (although you said that's on the higher end), your margin is tight, especially considering closing costs, realtor fees, and unexpected expenses.

What do you mean "at cost?"

Although the cost is high for these areas there is little new construction.

.- They asked for 100% upfront payment for the build and setup costs.

Asking price, cost of rehab (plus time to complete), ARV, and rent once rehab is complete.Asking price $50k.

.: Quote from @Cameron Moore: Another example: the average roof in DFW is replaced every 6 years and the average cost is $40k.

I would like this number to be lower since it's going to cost $120k up front for down payment and closing costs.

@Lexi Blocksom suggest you discuss in detail with @Russell BrazilYou've made a mistake thousands of naive investors have made - expecting Class A results from Class C & D properties:( In general, you'd want to compare what you can sell the property for now versus what it would cost to update it and what you could then sell it for.

The reason people hesitate to pursue ground-up construction here is because it's costly, unless you're building a two-family home where you can live in one unit and rent out the other.