Option #2: demo everything, create room for toilet and walk in shower, loose the tub if you have to or replace with free standing soaker for eye candy.

Tenants less than a year who are still in good standing get their move in fee back anyway.4.

Sounds good but that was a hefty down payment on your home, but whatever.Didn't mention credit standing, I assume it's good enough as you just bought one.As to financing, you begin having problems getting loans below 50K and at 75% LTV you'd be buying at 66,670, say 67ish and up.I'd suggest you speak to your lender again about future financing, terms and what they can offer.

That will give your offer an edge and at the very least make it stand out.Always - ACT FAST!

Do that times 3 percent and gross to the broker if own the firm is 7,500.From an owners stand point if I want to sell down the road I better have a very deep file on my tenants including ongoing liquidity and net worth statements along with monthly and annual disclosing of sales figures for the business location.We look at health ratios for certain industries and class of tenants.

You sound hesitant to do so, which means you likely did not do enough diligence on the contractor and don't have enough faith in your own decision to stand behind it. 

ARV = $125k-135k-though a home (4/2) 1100 sq ft two blocks away just sold for $170k.Rehab = $35k-$40k adding 2nd bathroom.Based on numbers, $60k is cutting it pretty close.What are some creative terms you would put on offer to stand out to the REO bank?

Imagine it a bit shorter for your single story facade:https://i.pinimg.com/236x/51/1d/39/511d390350f72596ebc9bb57589a7e5e--traditional-exterior-timber-frames.jpg A nice box bay under a gable, with a standing seam shed roof:https://i.pinimg.com/236x/fc/94/c6/fc94c631e2df20dbb1fa117fea512c41--traditional-exterior-ranch-homes.jpg Example of a small, very shallow box bay with a shed roof (yours would be wider and taller), easy and inexpensive to build:https://encrypted-tbn0.gstatic.com/images?

They do not stand by their investments.

Although it can potentially be risky, gearing it will give you a tax free realization of your equity while allowing you to keep your property and redistribute your capital into another, potentially larger property.As it stands you are still in the residential category as you are below 5 units.