If you don’t have a backup plan, you’re in for a rough time.I don’t say any of this to scare people off—I’ve navigated all these challenges and built a great portfolio.

I have from time to time spoken with the city administrator, economic developer, & a person at building planning commission.

I don't think the market will continue to appreciate as it has over the past few years and that equity isn't something I can realize until I sell the property which I don't plan to do. 

The initial plan was to do minor cosmetic things and bring the kitchen and bath up to date but not knowing this fact made our $5,000 budget go to $50k costing us the two year full rehab.

Even if the rental has a decent cash flow with additional flood insurance, we're still not sure we want to take on that risk as we are out-of-state investors (planning to move back to KY in the future, but not now) and we don't like that it will potentially bring down the perceived value when we try to sell it in the future.The seller has never lived there and has not provided any information on if it has flooded before or not. 

You can’t win the the present value game unless your plan is the absolute best investment plan, AND an owner occupant or neighbor doesn’t want it. 

Also, the turnover will be much lower, but maintenance costs might shift too, so it's good to plan for that.Happy to connect if you need more tips!

I had a similar strategy with my first few house hacks: buy in great A & B Chicago neighborhoods....get by with minimum cash flow, and wait...What's your plan for the next purchase Michael?

Sellers who are in financial distress or dealing with a property in poor condition might be more open to this type of arrangement if it helps them get back on their feet.The key to making this work is transparency and clear communication.

Make sure your wife agrees with this plan, though.