It’s a no brainer on the surface.

There is also mold on most surfaces, paint falling from the ceiling, no utilities, etc.I am thinking that this is a FULL gut job down to the studs, so I am prepared for that.

There is also mold on most surfaces, paint falling from the ceiling, no utilities, etc.I am thinking that this is a FULL gut job down to the studs, so I am prepared for that.

I believe you would need to have a smokin deal.. any 100% lender is going to demand that.. no mystery there.. but newbies don't usually get smokin deals  and who goes for 100% loans almost always newbies.. so if I was taking  a WAG their 3k fee is a major revenue maker for them that's why the guys on the phone hammer so hard to get folks to pay it.. this is what I have gleamed from other posts on this company on BP.. simply my observations.. also one lady who we went back and forth with ( potential borrower) said that they set up an LLC that borrower and lender are members and if borrower fails they just kick them out of the LLC.. and that is a smart move on their part.. you don't have to foreclose and if the borrower really has no skin in the game that's OK too. 

A reasonable LO will want you to have some "skin in the game" to go through that ($0 per hour) process of submitting it, you're basically asking them to count your willingness to provide ALL requested paperwork as that "skin."

Just go over the top with a different flooring surface.

The risk to the lender is too high when the borrower has zero skin in the game.

***Its important to note that on the refi part, you need to make sure that the property will appraise 20% higher than the amount you need to cover your 'all-in amount.' that extra 20% becomes your 20% of skin-in-the-game that the bank needs in place of your 20% down payment. 

What can be screened for in the future to avoid this and will the PM spread their placement fee over the tenancy to have more skin in tenant selection? 

Hi Paul,Water pressure from the outside can be powerful and this may not be able to hold it back butif it's coming through the walls you might want to try a water blocking paint such as:DRYLOK Extreme Masonry WaterprooferDRYLOK Etch (surface prep if needed)DRYLOK Fast Plug (Crack Patching if needed)I've seen this used in similar situations.