Prices in most of these areas will be close to or in excess of $1m for average (compared to other part of the country) type homes (significantly higher for areas I listed as upper class).Good luck

The remodel might not be the issue but if they are borrowing using hard money or even family money with excessive interest or fees they could be backwards on holding costs alone.And finally, they may have raised the price because they originally received multiple offers on their first go-round and when that deal fell through they decided to shoot higher.

I'm just trying to figure out if them also adding a management fee is excessive or if it just the standard.

Ok, I feel great if when I bought it for $678k I knew that 20 months later a bank would loan me 60 LTV on $1.2 million and I was going to walk out of the deal with excess cash and it was still cash flow positive after the refi.  

Any excess would be carried forward to the next year.

That being said IF you live in the property and airbnb excess capacity you are generally speaking ok  as long as you take certain precautions with your set up.

You may also be required to withhold taxes from the money if the income is considered effectively connected income(ECI) or Fixed, Determinable, Annual or periodic(FDAP).If the private lender is looking to become an equity partner - the same would apply that you may be required to withhold on his apportioned income if it is considered ECI/FDAP.The private lender may be required to apply for an ITIN.The private lender may be required to file a US tax return to claim a refund for any excess withholding.There are a lot that is involved as you can see.

So the excess 200k is boot and taxable- A very common outcome in simultaneous direct exchanges.You can still accomplish the sale as planned and defer all tax. 

The underwriter at the lender stated since this property would be defined as a non-compliant structure in the event of damage to the property in excess of 50%, they would not be able to sell the note on the secondary market. 

All returned cap rates well in excess of the average at the time.