None of us had ever heard of anything like this before - especially since the rest of the foundation looked really solid.Luckily, there's so much meat left on the bone that he'll still come out with a really good profit.My question to BP land is what could we have done differently?

You essentially have the bones marked out for it.

The house had solid bones, but we negotiated on some of the negatives: it had been sitting on the market, it was dated inside, and it had a potential foundation issue (completely checked out prior to closing).

I also ask this based on the end investor, how much meat do you leave on the bone for them, as far as the equity between fair market value and agreed purchase of the note?

I do run into older investors usually 70 and above who own big size portfolios and that was there business for decades running rentals. and by then they are all free and clear.. cash flow very large with no debt.. and monster equity of course even if the props never went up.as long as cap ex and turn over did not kill them along the way.. its the back bone of being a landlord..  

I work construction gigs as a carpenter and rehabbed my entire house down to the bare bones so I know all about that.I just bought "Housebuilding" A Do-It-Yourself Guide by R.J.

I'd have to run sewer and all utilities to it, as well as do a studs down remodel (it actually has good bones and a reletively newer asphalt shingle roof). 

You can as long as the contract does not specifically disallow it,  but it would be unusual for there to be enough meat on the bone in today's market for three levels of investors.

These are the back-bone workers  that won't see wild fluctuations in their income or employment.

The house has DOES HAVE good bones, A-neighborhood with close to 2 acres land space.