But, guess what; YOU DON'T HAVE THE MONEY TO DO THOSE IMPROVEMENTS.Spend the next year doing the following:Build your savingsLearn about REIGet rid of all your debtFigure out where you're going to live, if you can't commit to FIVE YEARS in one spot you have no business buying a house.I know this sounds unduly harsh to a young family trying to establish themselves.

Mitch,You don't have harsh elements.

Sorry you learned such a harsh lesson.

Sorry if I came across too harsh. 

Bob:Not trying to be harsh here, but it appears the biggest problem here is you do not appear interested in being a landlord. 

The posts here are evidence of that.Without trying to sound harsh, a private lending transaction is not rocket science, but it is complicated and should be handled by someone who knows that they are doing.  

So right now I am leaning toward the big bank, but I am concerned that they may appraise the property more harshly which could default the loanThe property is a turn-key deal with tenants living there for the past 5 years, and no plans to move. 

Even if you're replying to someone that was disagreeing with me, your tone is a bit harsh. 

Going East outside of San Diego to Imperial County is a fairly long drive with harsh environment and smaller cities with a different tenant class. 

I can go for a short drive and find entire neighborhoods that fit the 2% rule in my area, but I would never invest in this area unless I got an excellent price that allowed for a full redo of the plumbing/electrical/HVAC because the properties are old and undoubtedly have deferred maintenance; landlords/slumlords in the area have been known to do the work themselves; and I don't want to deal with countless minor maintenance issues (eg. leaking faucets, malfunctioning outlets, etc.) that are bound to arise in a property with old and/or shoddy plumbing/electrical/HVAC.I don't mean to sound harsh in any of my response.