2 unit house 30 year FHA 6.6% major renovations (roof,bathrooms,kitchen,etc) home has appreciated 397k when appraised to 550k zestimate (similar comps in the area are 500k).

If before getting a permit you have to dance around for Code Dept officials/ city gov and crime is thru the roof, investments will definitely be low whether real estate or other, but it should be benefiting the city officials to keep things that way.

This is correct, so I would disclose every aspect of the sub to and how it relates to the seller, perhaps going so far as to insisting the seller sign off on an acknowledgment that he understands the ramifications.  

These details and the creative aspect of an STR seem like they will be an exciting avenue. 

So I almost “broken even” with the cost of construction vs. valuation aspect.

I also want to clarify that I do still keep a decent amount of cash - just not enough to cover every single property roof at the same time if that ever happened for some reason. 

Raising equity can be the most challenging aspect of closing a deal.

The old adage is true in real estate as other aspects of life - if it seems to good to be true it probably is. 

Ex:  A roof in my area cost 9,000 and will last 25 years.  9,000 / 25 yrs is $360 a year. 

Do you remove the roof from your houses because roofs do not prevent flooding?