As lenders, well issue a prequal/preapproval letter if we've analyzed your income, assets (bank and brokerage statements to establish that you have the liquidity to afford the down payment, closing costs, and reserves), review credit of the guarantors, review the relevant experience to ensure that we're not throwing our money away on newbies that are wandering around in the dark, and have put together a reasonable plan of attack for the project.

Im not a lawyer, Id flip that house though. maybe get the priest to come throw some holy water on it. 

Some of the best BRRRR deals I have seen play out this way:You buy a home cheap enough that when you do a renovation and pull out 75-80% LTV, your rent covers your mortgage and you have returned most of your investmentThis is for A-B class areas. 

I have a mortgage connected that, for some reason, reports it as an escrow balance, throwing off my balance sheet. 

Other asset classes aren't so the depreciation schedule may not be as quick/beneficial.2) And it is even possible to find deals that are what I call "super-shielders" and which not only shield all the distributions in the investment but have extra to use over on other real estate investments that are throwing off income. 3) Unless you're doing a 1031 exchange  at the end or similar tax structure to defer taxes, you will have to *pay back* all that depreciation benefit at the end (on sale...which for you is in 5 years)  via depreciation recapture.

Defense was just something like I just wanted to buy a part of San Francisco for cheap, I wasn't planning to do anything sinister.   

The lot I am looking at is near a Dam and the power in my area is super cheap.  

We have a tons of lots around here like the one you described, many of which can be bought for cheap and are not listed because there are just barely any buyers for such.

They buy up lots in nowhere that you can do nothing with and then act like they've been liquidated by the government so they can sell them off supposedly cheap.

Throw in a few nice touches, like coffee or board games, to wow your guests.Keep extra linens, cleaning supplies, and essentials like toilet paper handy so turnovers are quick and easy.