Also, what would happen if you were not able to sell the property after the 30 days are up?

It's a giant house of cards and only the first couple of cards have been removed at this point.

I know of one local contractor that does and that's only because of a giant markup and having a big enough bankroll to not worry

My lender is telling me, 40 days into the cash-out refinance process, that in Texas, you are not able to take cash out on an investment property, only on primary residences. 

Most notably, it looks like we will need to re-do all the plumbing to replace into pvc pipes, and also converting the gas heat into electric so we can separately meter the electricity and also replacing and modernizing up from knob and tube wiring.

@Greg H.I recently bought a HUD home in Newark and the process was a bit painful due to we were not able to close the deal time.As mentioned above, you'll need a Real estate agent that is approved by HUD as well as the title company.

While it certainly seems like an interesting opportunity, it's just a can of worms I'm not able to open (more fully) at the moment (like the possibility of zoning, insurance, etc).

Not able to get traditional financing equates to higher risk.

Notably, your 10% interest is a high starting point, so the liquidity premium results in a higher overall return standard than most.

Servicing fees in general can really eat into your returns, notably on lower-dollar loans.