I expect greater than 10% just for the loss of residential F/f financing.at 10% difference, or even 15% difference, coop would be up there with lot splits on sophisticated value add.  

I have seen it too many times where an investor will buy an older property or even a new build, they net cashflow similar to you for a year ($100-$200 per month) and then a $5,000 repair or insurance/tax hike here hits them and it's a loss - they either get forced to sell or are majorly setback and unmotivated. 

Loss of Use / Loss of Rents: Normally, there is a 20% included limit.

Although the list may seem intensive, I look at it like this: The total cost of all these items can be much lower than the cost to repair a hidden surprise after purchasing a property to flip. 

If your AGI is over $150K, passive loss limitations may apply.Setting up an LLC is straightforward but consider state fees, tax implications, and liability protection when making your decision.

And you now have to file three tax returns:- partnership tax return- your individual tax return reporting 1/2 of the partnership losses- your partner's individual tax return reporting their 1/2 of the partnership lossesAnd while partnership return can be DIY-ed, it probably should not be.

Once a complete loss mitigation application is received, the servicer must review that application before starting the foreclosure process.""

Another item to think about on this when getting into flipping or rentals in smaller communities is the vendors or contractors that are in the area.

Make sure to go through their estimates carefully as they may include some items that are not needed (e.g.: they added cost to board up fireplace but the house doesn't have one)- Make sure to verify if all the work is complete as agreed.

To help expedite the rental unit approval/inspection, you can also talk with your local housing provider that runs the Sec 8 program what basic items they look for and make sure you have those covered.