I don't like FHA, if it can be avoided.As far as the analysis:I would definitely budget more than $2k for initial repairs.

Even if it were a month ago, Mike, once you add your wholesale fee and a more realistic rehab budget, this is not a very good deal.

It is more like "I want a primary residency, and great it has a 2ndary suite".Option B: Get your $30k reno budget checked with someone else.

Purchase Price: $300kMortgage Payment (Interest Only): renegotiating to $500 Taxes: $375/monIns: $100/monLawn: $100/monVacancy/Repairs/CapEx: $300/monTotal Monthly Expenses: $1375Total Monthly Rent after Reno: $2000/monTotal Monthly Cash Flow: $625Rehab Budget: $50kTotal Annual Cash Flow: $7500Cash on Cash ROI: 15%Build New: The biggest barrier to entry is the size house this neighborhood calls for.

While jotting down my budget I see that the profit I make for rent could potentially pay the monthly payment for the HELOC.

I have been renting for the past two years for $1,200/month, which has been fitting into my budget.

I have been renting for the past two years for $1,200/month, which has been fitting into my budget.

Even though this is an extreme overestimate, I understand that work may go over budget.

Include a budget for initial repairs.

Capex budget has to account for roof, floors, appliances, hot water heater, hvac, etc.