@Dave Toelkes Thanks, that makes sense.

We used a similar strategy when we got started, to flip some of the deals where the numbers didn’t make sense as rentals, and fix-to-rent the houses that cash flowed.  

So negotiate a price that you deem fair that makes sense for the property. 

Does it make sense to house hack a SFH during a peak market?

And of course there will be PMI.If keeping that 5% in your pocket will allow you to fix the property up and achieve 25% equity, positioning you for an advantageous refinance, or if that 5% will let you fix it up so the bumped rent is greater than the bumped P&I payment (eg, 15% down costs $150/mo more, but the new kitchen it allowed you to put in lets you bump rent $250/mo), those are basically the top 2 times that 15% down makes sense. 

I was thinking it would make sense to make contact, establish the relationship by getting them to sign a new lease, and then proceeding from there.

While this isn't a home run by any sense you can see how this can quickly scale.

It just doesn’t make intuitive sense.

@Upen Patel You made me curious when you say that a HML is a mortgage irrespective of whether it has been recorded are you saying in the sense that it’s a loan on a piece of property and therefore a mortgage or is there another method of legally recording a mortgage?

Don't be scared to lose your earnest money if the numbers stop making sense.