They are pretty normal expenses but the attorney usually writes the checks for you and you just bring one cashiers check to the closing.

I normally don't get spooked by foundation issues, just treat it like any other problem I'll have to deal with.

Lots as a general rule trade at 25% of the finished homes value.. its a general rule but a 500k home lots normally go for 100 ish. of course that does change a few years ago in some markets you could buy 10k lots and sell 200k houses.. think OKC  TX those areas were new construction is built for a fraction of the price of other markets. were that can be inverse is say in an area like Palo Alto or SF peninsula were you may pay 2 mil for a lot and spent 1 mil on the house and sell for 4 mil  :)  2,500 sq ft maybe smaller. 

@Billie ChenThere is normally less competition for homes that need work done.Less competition = more built in value.With that said, if it is your first deal, you may want the easier one. 

@Matthew Forrest this is a new law for us here in CA so there is still some ambiguity in the process.The lenders we use are saying that they will lend based on the new income (as long as the ADUs are permitted) and essentially count the ADUs as normal units. 

Bank fees also matter, the #1 retail mortgage bank in the country advertises rates with about 2 points in junk fees ($10k in extra fees on a $500k loan on top of normal closing costs). 

I'm completely speculating here, but for example- they detected the presence of an underground septic tank in an area normally known for city sewer connections, and felt incapable of testing that specific component to their satisfaction. 

Is this normal?

-Current tenets do not have the best credit-tenets do not have 20% down payment-If I increased rent to the max $1250 i see them moving I would like to sell to the existing renters to reduce the sales fees and the head ache of having to list and move them out to paint, replace carpet, etc, plus they are really good peopleIm seeing my options as:1: Normal sale...and move them out(realtor said not to many investors in the area are paying $225k for a $1100 a month profit)2: offer to them and hope they can figure out traditional financing 3:?????

Deviate from your normal investment mindset - and start thinking creatively house you can get into the game by hacking your current living situation, or investment strategy.