Try to minimize financial loss in the process which is what you did.You can still try to pursue him for damages.

For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

From kicking myself for not doing enough thorough research into the basement and foundation of the home to experiencing delay after delay with the water heater and boiler.

But I do question if it is wise to delay rehab for so long.

I was hoping to purchase a couple of properties from my parents with the ultimate goal of minimizing tax burden for them. 

This house is around 700 sq/ft with a sagging roof, 1 interior wall separating this area with the kitchen, minimal floor joists, hardly any electrical and no plumbing.

I just think it's harder for some people to save up plus I want to minimize surprises such as tenant racking up huge bills or suspect water usage (We are in closing now where seller just found out tenant hasn't been paying water bill and it's $1300 and tenant SD is only $800).

So, that's materials, project management cost, caring cost, permits, taxes, insurance, architecture, utility hookups, inspections, delays etc.

You'd also want to learn more about the asset you'd foreclose on, if it has significant delayed CAPEX and is struggling financially and you don't have the capital or know-how to fix it, you could be inheriting more headache than wealth.

With the appreciation, tax benefits, offset mortgage, etc. the upfront costs in undertaking a good sized project are minimal compared to what is possible 5,10,15 years down the line...Just something to keep in mind