Why not just go to a bank or private lender rather than play with that very high interest money?

Try looking at it a slightly different way with some quick math:$900,000 sales price$22,500 cost of purchase (appraisal, points, lender fees, title fees, etc - 2.5%)$90,000 cost of sale (10% commissions, closing costs, buyer credits)$64,000 carrying costs (6 months at 10%)$25,000 additional carrying costs (6 months taxes, utilities, HOA, misc)$100,000 rehab cost (the number used above)$68,500 profit = $530,000 max allowable offer.Some numbers may be a bit high, others may be a bit low. 

There is a high demand for rentals and not nearly enough inventory.

In addition, I would discuss what your thinking and what your attorneys advise with your CPA to make sure you have a complete picture of everything involved and how it will effect your bottom line. 

Quote from @Jonathan Bock: Speculation in land has been a thing for a couple thousand years  And there is a famous quote and picture

High appreciation, high dollar appreciation (3% increase in rent on a $3K/month is better than 3% appreciation on $1,000/month).

He had put pictures on the walls with nails and put a shelf/rack in the master bathroom which put holes in our walls.

@Bryson WilliamsTypically you would have your tenants pay their own utilities since you wouldn't want to cover someone's high water or electricity/gas bills but some cities will put a lien on your property if certain utilities aren't paid.

I live in California and like many California Investors prices are just too high in the area I live.

I was able to set and get the rent high enough at the AZ home to cover both the orginal mortgage and the equity loan.