@Jay Hinrichs This sounds high to me, even by CA standards sinc ethis is a remodel only without adding any square feet ths no structural engineering needed.

What is the best structure?

Hi,If you are planning on holding the property long term.I would bring in a professional engineer or company that specializes in this sort of stuff and have them do a survey, report and written instructions as to exactly what should be done to permanently rememdy the issue.This is a big problem in JC so I am sure that there are people out there that are well versed in this sort of stuff and what the best solutions are.Perhaps reach out to local insurance companies to see who they have paid out to in the past to repair these sorts of issues or write reports on the findings.Problems like this have a habit of coming back again and again along with the cost to fix it.So it might be worth shelling out the money to get it done the best way possible so that you can.

For a first investment property though, I’d recommend staying away from foundation and structural issues, or serious water damage.

The way I structured the deal was that I get monthly management fee's plus a year end bonus based on how much the property increased his net worth!

Any structural or big rehab is also out of my area of expertise.

If that amount is too high for you, is there a way to structure things where you're not coming too deep out of pocket to take the deal down? 

Lenders can go upto 80% LTV by having an A/B structure.

Most of the issues that could come up on an FHA appraisal are pretty common sense; mainly safety hazards and structural issues.

Careful structuring the insurance policy as most Vacant or BR policies do not allow for tenant occupancy.