Be kind but in control. 

This agreement does not prevent you from making a passive investment in any publicly traded securities so long as such investment does not confer upon you or any entity that controls you, is controlled by you, or is under your common control of 5% or more of the outstanding securities of any such entity as described above.

Its an out of control dystopian nightmare, and its getting to me. 

About 5 years ago, we (my wife and I) really took control of our finances and I worked relentlessly to understand our avenues for retirement and savings.

In this scenario, the cap rate analysis actually leads to a wrong decision precisely because it takes equity out of the equation.

You still control it as a rental but you get your exclusion, plus the value for depreciation starts at market value rather than your current cost basis.

Ultimately I’m trying to get in a position to control the property prior to foreclosure in the hopes of not having to compete for it at the foreclosure sale where I believe it wont sell and end up going back to the FHA although I have no idea what the opening price might be.

The government wants none of the financial liability for the housing business, but all of the control.

Get at least three quotes for each, but be sure you've developed a precise scope of work for the rehab and build specs for the new construction, right down to the number and location of electrical outlets and what kind of doorbell will be installed. 

My friend introduced me to BiggerPockets while we were selling pest control last summer.