And if we are sliding into recession not just a soft landing, that Small Caps/commodities-minerals/BDCs (with falling net interest margins as 10yr falls and rising defaults) may all be a dangerous place to be? 

He'll need to set the heads, run the lines, hook up the lines, ensure a vacuum, pressure test, and release refrigerant, perhaps even adding some.The contractor knows he's not making a ton of money, and even though his margins aren't there because you're supplying the units, he needs to factor in you calling him and expecting warranty service if something runs afoul.

Those prices range from $800k-$1.5M depending on the specifics but the income increase is as much and the cost to own is slightly lower because insurance, maintenance, and utility costs do not go up linearly on these making a bigger margin for you.  

I am worried not only about escalating costs but also about diminishing profit margins due to delays in obtaining permits.

To many investors, the goal is highest margin for least amount of effort.  

With reduced margins and a longer time to get the payback from selling there is an increased risk to the flippers not to mention the high taxes they pay.

This leaves a margin to cover holding costs, financing expenses, and still achieve a desirable profit.Here's the formula:Max Purchase Price = (ARV x 0.7) - Estimated Renovation CostsKeep in mind that this is a guideline and not a strict rule.

And there are certainly large margins to be made.. the big builders in many markets want lots in real time they look for middle men to bring them to them.. in our Market here in PDX where they are located there are a few of them..

That gives you enough margin to work with and make a profit and have the highest # of people looking in that price range since it's closest to the median price point of home here.

The realtor tried to talk me up to at least 175 but… that’s cutting a bit into my profit margin and I’m not that eager to buy it because that’d also be my biggest renovation project.