If they are only lending 50-65% of the current value, the property will be the most important factor in their underwriting decision.Not having money for DPs is usually a symptom of other things.  

@Shannon Sadik There is a product that we use, it is called Kilz, we use them even for fire damaged room, factor those out and the painting expense and embed them in your contract.

Do you still factor in the “rent” of an owner occupied unit when calculating the value and other valuations?

Most designs before 1970's don't have enough seismic load factor, so they are weaker than today's standard. 

The janitor expense seems interesting as well as I am not sure who charges $33 per month to clean a common area...Here is what I would guess the building really looks like:Gross income minus 10% vacancy factor= $148770NOI using the 50% rule= $74,385True cap rate then would be 11.4.

I would also factor in concessions, and bad debt.

Based on these factors (and the fact that I am new and would prefer cash now to do more deals) I am leaning towards flipping the home.Thanks again. 

It's all factored into the contractor's bid.

I realize there is A LOT to learn, however, that is not above my capabilities.It is my intention to build a company which utilizes integrity and honesty helping the community with creative Real Estate solutions to achieve my financial success and stability.It is my goal to actually retire in 5 to 7 years and be able to do the things which retired people do, such as take my wife on a vacation (which we have never done & she is already retired), and just relax in general.This site was referred to by another investor contact previously in another venue, I came to check it out and I like what I see so here I am.

Prices will reflect that, but buying dirt cheap means selling dirt cheap in a small town that isn't "related" to a larger market.Study real estate basics, location, market influences, inventory turn over, economic factors that effect value.