I'm glad that you're educating yourself, but don't get trapped, gotta take action as well.

Traps could be cracked , pipes split , not including drywall and flooring from the water .

It seems like you know that over optimism is a risk so you'll be less susceptible to that behavioral trap.

The only lines they fill are the traps for the drains .

Rent is in section 8 housing and rent comes in on the 1st every month  Rent: 700$House has passed all government paperwork to be section 8 compliant. yearly insurance is 345$would need to use property management company to manage the property. utilities are paid for by the tenant.Does this add up? 

If the bathroom really hasn't been used in a while it is likely that one or more of the traps have dried out. 

You are going to have 20k trapped, plus the cost of the refinance in 6 months (seasoning).

The bigger and more judgments there are, the more you need to look out.I see many landlords fall into the trap of just thinking, well since they are renting they must have bad credit.

Another 50-100 in P trap + water lines. 

Then no need to refinance after the rehab, but you have more equity trapped in the property value.