That is based on type of policy and construction value of the property.

So I said ok I will cash it out this week and give you 2k. they accepted I bought the house tore it down and resold the new construction at 750k.. .and made a quite nice pay day for our team. 

The area is seeing a surge in new condo and town home construction so clearly there are investors who have put there money in the neighborhood.

Two questions regarding SFH construction by an owner that is not a licensed GC.1) Can I build a SFH to be used for a rental?

Ideally, I’d be securing and managing all aspects of the financing and he would only focus on the construction aspect.

. §1.165-9(b)Property converted from personal use(1) If property purchased or constructed by the taxpayer for use as his personal residence is, prior to its sale, rented or otherwise appropriated to income-producing purposes and is used for such purposes up to the time of its sale, a loss sustained on the sale of the property shall be allowed as a deduction under section 165(a).(2) The loss allowed under this paragraph upon the sale of the property shall be the excess of the adjusted basis prescribed in § 1.1011-1 for determining loss over the amount realized from the sale.

The goal being to gross 2000 a month to leave as much room on the bone for all other expenses and to make it more attractive to the bank.

In our day-to-day we run a local construction company (roofing and exteriors), so it's very rare that we come across a property that will scare us off from a rehab standpoint.  

I purchased the park for $125K, putting 25K down and financing the rest with a local bank.When I put it under contract, there were 15 trailers in the park, each paying monthly while they worked energy and construction jobs in the area.

My day job is owner of a construction company, roofing specifically.