Just looking at my situation, I am paying the contractor cost plus 10%. 

There also aren't too many properties out there that have a value add because buyers will pay top dollar for whatever comes on the market.

the overall benefits remain great - mortgage paydown, tax benefits, rent growth, appreciation hopefully - but short term cash flow has taken a huge hit with the rise in interest rates. 

Also, don't dismiss paying for capital raising.

@Margot WeatherfordIf I am looking to purchase this deal, I want to look at in place NOI, because that's what I am going to be able to lend on.I do not want to pay for potential.

I’ve got a bit of a weird tax question.

Once the foreclosure process has started, you can only get the train back on the tracks if you can pay off their loan and liens, which someone probably would have done earlier on a short sale if the upset value wasn't too high.

Now they have come to realize that the renovation costs are much higher than expected and are looking for suckers who would be willing to pay a lot for buildings that have sat empty for years and have blight liens against them?

Build in a more affluent area and focus on private-pay residents where monthly fees run $6,500 - $10,000+. 

What if I were to tell you the Investor A triplex was sold two years later for a $100K profit whereas Investor B is run down and exhausted from managing their four "C" neighborhood single family homes and when investor B goes to sell,  they can only attract break even offers because the only buyers who would step to the plate were investors who were not willing to pay retail with so much distressed opportunity available in the "C" neighborhood due to limited barriers of entry.