The renovation costs may include a contingency reserve and renovation-related costs.Contingency Reserves: Contingency reserves 10 % required for any unforeseen cost overruns that may occur during construction.Unused contingency reserves that were financed into the loan will be applied to the principal balance of the loan.

This is why you fully write off repairs and maintenance in the year that they occur- by definition, those expenses don't add value or life to the house.

The closing occurred right before Christmas/New Year holiday so getting anything done is hit/miss.

If it's not a PT, it would at least limit your flexibility with the investment and increase the likelihood of a PT occurring at some point during the life of the investment.

Well, it looks like the foreclosure did occur in October, though usually the “price” is $100, not $200, when no one bids due to the revealed max bid.You need to look at the foreclosure file for the sale back in October, I assume the case no.s for the one in October and the one now are the same....that October sale was likely set aside for some reason, and rescheduled for now.One somewhat confusing point, Who (as the owner...is it an REO listing or not)has the property for sale now, that shows pending?

As for the worst that can happen.....The county/city fines you for illegally doing work without a permit, and you have to tear it out tooA fire or other accident occurs due to your illegal renovations, someone dies????

Much learning has occurred over the course of this post and I clearly see that I was budgeting too much for paint.

When a slowdown occurs (sooner or later) will you be able to weather the storm if you have a vacancy? 

But as you are realizing, vacancies, repairs and particularly large capex items which are unavoidable at some point will eat that “phantom” cash flow you thought you had.I own tracked heavy equipment, and every few years you’ve got a $25k track replacement bill.....you've got to calculate those in “as you go”, before they occur.

Auction occurs the first Tuesday of the month.