I’ve heard about ‘gap funding’ for fix & flips to cover down/closing/holding costs in addition to the hard money loan for most of the purchase price & rehab, but how realistic is it to secure that type of funding?

You seem “golden” in any court case when the city inspector was out and didn’t notice it, they didn’t notice it, and you twice agreed to let them go at no cost. 

There are some scenarios which can change the equation and take priority over the opportunity cost equation demonstrated above.  

His cost basis at that time plus any extra amount he spent would be his new cost basis.

New builds are far more desirable, and have less total cost of ownership than many of the stick framed, pre-existing, non conforming older homes. 

Obviously aside from minor material cost savings the biggest reason is to save labor on all of the cutting in, which I feel would likely be moot with 3 sheens.

It's going to cost about $550k to build and it has already appraised well over $800k.

The well serves about 74 properties (some lots are vacant)  of which currently 40 are paying and the owner estimates as many as 18 may be stealing water.

Look for properties priced at least 20-30% below market value to account for renovation costs and profit margin.

Quick Turnaround: Whole-tailing allows for rapid transactions, minimizing holding costs.