Your statements about projected profits seem pretty inflated to me, and the description of the work seems pretty understated. 

This one can't be understated.  

You're understating the savings.

I'd also ask your attorney as to having an ownership interest under state law as it may apply to your situation.

—In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to— (1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and (2) the rights of any bona fide tenant, as of the date of such notice of foreclosure— (A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1);or(B) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1), except that nothing under this section shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenant.Under 2A, if they signed the lease after the notice of trustee sale is filed, then they are not bona fide tenants.

@Seth WilliamsKen Rishal was very under stated in his comment.

Expenses are almost always understated.

Under state law, at 20% equity, you would have to foreclose on the borrower and would not be able to use land contract forfeiture provisions (more like an eviction).Oceans of ink have been spilled here talking about the SAFE Act and Dodd Frank regulation that seller-financers have to abide by now, and the implementation varies by state, and there is still lots of ambiguity in how it will be interpreted and enforced.

So they can compete with each other. biggest one is under stating on going maintenance when your buying these older homes your just going to have issues come up through out the year...I think the statement "live were you want and invest were it makes sense or is affordable" leads many down a very bad path if they try to do it on their own with little or no ability to analyze the risk and are putting 100% of there outcome in for profit companies. .  ....

@Chris Hougland you got it right those are the numbers and return in buy and hold in hot markets is 6 to 8% if one is using real numbers and being honest with one's self.. when you look at TK companies cost are usually missing or understated.