Lots of investors have been wrecked this way.

Hi Bailey,I have a couple of suggestions...I just read this bigger pockets article that sums up the current market situation pretty succinctly:https://www.biggerpockets.com/blog/a-robust-economy-is-wreck...In short, it says it's pretty tough to get started right now.  

I have been saying this from Day one when the Morby and sub 2 guys started touting and charging for this .. that you are going to have a train wreck follow these transactions .

Point is, if I were to purchase the property, legal as it may be, that leaves me the buyer with a large problem on my hands (not to mention all the clutter that was apparent (old frig, busted up TV, two wrecked cars, etc.). 

Apparently, the home was a wreck and inhabited by a squatter.

Hey Travis, I close a number of these for clients, usually more common on properties that were wrecked by previous tenants and they want to use existing equity to help repair the damages.We would classify it as a 'Refi-rehab' that would include a direct 'cash out' portion as well as a rehab escrow to reimburse you after you finish the repairs.

We were forced to have flood insurance on the home and that was the best investment we made because of a storm that wrecked havoc int he neighborhood last year.

You need to think about what your plan is for health insurance because a bad turn can wreck you financially.

Because if it turns out that there's no market to rent it out, or it is a total train wreck, at least you're not paying rent in your current place as well. 

Guarantee you will find more S8 tenants than cash tenants, but they may wreck your house.So, that leaves either STR or MTR strategy.If you can do that for the next 2-3 years, you can then either keep it as STR or MTR if all is going well or sell it to get the $250/$500k capital gain exception.