Reading through the posts you can see everyone has their own advice on this but the reality is having an upfront time table to do the job is key with your contractor.  

When I ran the numbers and timetable, I figured that I could could do two rehabs in the same amount of time for about the same amount of money.

This messed up my timetables because I had planned for the house to be habitable within 3 months of purchase which was very feasible until I ran into this snag with the renovation loan process.

You may get some more complete answers there.In the meantime, a few things to keep in mind.The reno costs will most likely be considered Capital Expenses, which need to be amortized over several years (lots of different time tables depending on what the improvements are).I've you've been claiming depreciation, the gov't with expect that to be recaptured at the time of sale.

A REO/Foreclosure is sold by a bank & they are NOT motivated in the way an actual individual is.Now an actual individual that is actually going through the foreclosure process is motivated, but that is entirely a different beast to tackle to wholesale, you have to know the foreclosure timetables, mortgage payoffs, possible liens, also any particular laws that may apply in your state with buying pre-foreclosure properties.

@Jacob Szeto depending on your time table, you could look into a different lender.Use the extra $10k by renovating the kitchen and bathrooms, then increase rent by an extra $50 per monthOr use it to split the utilities (if possible). 

Not doing a refi yet because I need some money to fix the property and not sure on the time table.  

Then they should have filed for eviction following the tightest allowable timetable by law. 

Commerical properties are a little different as you have shorter fixed-rate timetables, you’ll have to qualify for refinancing, they’ll want a 75% LTV and the “V” will decline if the rents do, etc.

I feel like my world was turned upside down as I have interested renters and now the timetable is of course being pushed back.Anyone have similar issues dealing with their city?