You can do a great job estimating everything today, you can estimate ever component down to the screw, but if you don't adjust your reserves and budget for the future value of the capex, it may hurt when the time comes!

If you're finding that you won't be able to get into what you want, you can then start looking into something with owner financing or perhaps adjust your plans accordingly.

You say "conventional" which by definition would be 20-30 year locked in, no adjustments.

Without inflation adjustments, and dividend reinvestment enabled, the annual S&P 500 return from 1995 to 2015 has been about 8.6%, so, in this very specific, simplistic, model, it seems to come out better.Naturally there's way more factors that play in - love to see folks poke holes in this and tell me where I went wrong, and what guesses/assumptions I missed calling out!

taxes are adjusted to new buyer and not prop13 rates for 20+y ownership.suggested rents are competitive with rents in the market ?

Also, no guarantees that if the inspection was done say June 1st, that by now in the areas where the cheap tax homes are, that further stripping, squatting or just plain old vandalism hasn't done even more damage, although the city may adjust the price for that, but if there's another 5 grand in damage to a $2500 house, that doesn't then make the price -$2500.00!!!

As for he insurance adjuster, it is standard procedure for them to inspect the loss.The contractor wants to walk with the adjuster to make sure he is not going to do work he will compensated for.  

The rate is adjustable on our heloc but through our credit union is only 4.25% at this time...

If I am reading your original post correctly, it appears as though you have either an adjustable rate mortgage, or you have a balloon payment.  

When you look at your appraisal, look at how the adjustments were made to the comps used to come up with the value of your house.