I would try a home improvement store.

@Philip Olivier  The city shutting off the power was when they started enforcing the new rules for short term rentals 2 years ago or so ago. 

Stop issuing 1099-MISC with box 7 "non-employee compensation" instead of box 1 "rent"Stop including refundable deposits in rent incomeProvide annual reports clearly delineated by propertyLearn the difference between maintenance, repairs and improvements and report accordinglyReport insurance reimbursements separatelyProvide supporting documentation: itemized contractor's invoices, insurance adjusters' reports etc

In this case, the owner moved in, lived there, and improved the property.

Here are some rules to follow to mitigate risk if buying at this point in the cycle:Buy for Cash FlowMake sure your asset is spinning off plenty of cash to the point that you can experience a year at double the average vacancy rate and still be cash flow positive.

Now that you know how to calculate the current value or potential purchase price on the property...let's talk about determining ARV on this asset. 1) Do a complete rent comp analysis to determine if there is room to push the rents higher2) If there is room to increase rents...then you can start to determine what the value of the property would be after increasing the rents. 3) This will then allow you to back track to determine how much you would be willing to spend per door on CapEx improvements to achieve the rent premium.

If the $20k is used to buy another property, it could be deductible against that new property, requiring that you comply with interest tracing rules.

It is almost making the 2% rule and I feel it will cash flow.

Also, since there are state and federal rules about the terms you can use when originating a loan, I wonder if note holders also take on some new roles or obligations.

@Stephen RookerA good rule of thumb to use is $100/sqft, though keep in mind there are a significant number of factors that will effect the end number, especially with multi unit construction.