Sometimes you can reduce utilities by energy saving methods such as higher efficiency fixtures.

One word... efficient!

We're able to make more money on that spread because we have networks and economies of scale for both finding props and rehabbing them that mean we can be faster, more efficient, and have a better negotiation position when buying distressed properties (we have liquid capital, networks of wholesalers that come to us first etc).

2) Will the asset be more efficient?

Honesty, efficiency, reliability and quality is what we are obviously looking for :).

You can be very successful doing it too...and your 3 year timeline can be achieved, depending on the market you invest in.Now, in order to actually execute this, what you need to learn is the following: 1 - How to analyze Markets to find the Micro-Markets to invest in for your flips and/or your holds.2 - How Money Works, and how to use (not spend) it to maximize its efficiency.3 - How to design the actual Plan of how to execute this.4 - How to apply numbers 1 - 3 above together as one system, where none of the 3 knowledge bases listed here are left out. 

Like any business if you know what you are doing then it's a efficient business, but we spend a few hours a month including cleaning for each of the properties but its not easy to ge there if you aren't willing to put the time and effort in.

These are not as readily available as the statutes (searchable databases require subscription fees) and require some expertise to efficiently find applicable decisions. 

He and I agreed this is a bad idea and he will do a more official purchase agreement that will ultimately be seller financing.But I thought I would ask for him and for my education if there are any recommendations on tax efficient ways for him to acquire the house since it is in the family.

That was fine and fairly efficient for a basic analysis, but I analyze everything and ended up with a bunch of the spreadsheets.