@Nat Chan I never understood why contractors would ask for a large deposit to start a project, here in California your limited to what can be asked up front generally up to $1000 or 10%, which ever is less.I never give deposit, most contractors that we deal with have a clear and well define scope of work, attached with a detail schedule of values (Especially for large projects that run a couple of months) and a construction schedule complete with milestones.

I just think there's more than one way to look at his situation and that he should choose whichever suits his situation best.

Within one year, it's the cost of acquisition plus hard costs of improvements (or sale price) OR the appraised value, which ever is less.

The absolute best thing you can do is to do whichever puts warm fuzzies in your stomach.

In California, we have an article in the state constitution that limits the annual increase to the inflation rate or 2% (whichever is less).

I will also be looking for a new real estate team in whichever area that I choose to invest so if there are any real estate agents or hard money lenders that I could start to build a relationship with now, that could possibly sway my decision.

Go find ALL the vacant properties you can, write down the addresses and give them to whichever investor you come to agreement with for a bird dog fee ($500-$1,000 per closed property).  

When you want to cash out after rehab(delayed financing exception)  you will get 70% of appraisal value or  your initial purchase  price  which ever is lower.  

The property will be rented to Applicant on a _____________________ basis at a rent of $_________ per month, if Applicant signs Landlord's written _____________________ and pays Landlord the first month's rent and a $_________ security deposit on or before that date, in which event the holding deposit will be applied to the first month's rent.This Agreement depends upon Landlord receiving a satisfactory report of Applicant's references and credit history.

The warranty deed is very important because without it several title comanies will not "guarantee" their title search which is what gives the buyer an guarantee of clear title.A quit claim deed just does not do this adequately.Then when filing with the county, no matter what the property is sold for, there is often a question that you will have to answer that says that the amount listed is the amount paid for the property OR the actual value of the property WHICHEVER IS GREATER.