Quote from @Jerry Zigounakis: This just in from proper insurance"Thank you for your interest in Proper Insurance® Due to strict brush/forest fire scrutiny, our program underwriters have declined your property coverage.

You will also discover the warranties don't cover as much as you think, and claims are often denied.Home warranties are so bad that most professional property managers will not manage a property with one in place.

Keep the property IMO.

- If you are putting an offer in on a property to get that property under contract, part of the contract is that you put up earnest money.

My thinking is I would have to wait until I dispose of the property.  

They had about 90k into the property.

You will report worldwide income on your federal and Kansas tax returns.You will also include the MO activity on your KS return.Your MO return will only include the acitivity within that state, which in this case, is the rental property.In the future, if you have income in MO(either through the sale of the property or through rental income), you will pay tax to MO but KS will give you a credit for any taxes you pay to MO.best of luck

Quote from @Timothy Frazier: Is it a bad idea to use a hard money loan as a downpayment for a turnkey property?

How nice is the property?

I would suggest you hire an inspector as well as have a general contractor go out to the property.