A lender should be able to structure the loan to reflect at least a 1.00 DSCR.

It's always a mild red flag with a home is selling with more bedrooms or bathrooms than reflected on assessor records.My recommendation to clients is usually along these lines: if you want to do an interior remodel without permits, go for it.

If it is less, then this is a positive to consider.Typically when advising new investors in these properties, I plan on 12-18 months with a break even reflection. 

@Ange JohnsonUnfortunately, the IRS will adjust the return to reflect proper depreciation and calculation of depreciation recapture in the event of an audit.People think negatively of depreciation recapture but its actually a positive.You can potentially be getting a deduction at the highest tax rate when the depreciation is taken and only pay 25% max upon the sale.

So reflecting back to all the comments on the 'correct rents' in your area - if you're sure that the rental amounts are NOT up to standard - why wouldn't you want to start with an empty building, make your repairs, and then rent Or kick the one that won't show you their unit ... move into it while you fix up whatever's needed over the first few months, while you're raising the rent on the other side. 

OK maybe this is only a reflection of the current market -- not been at this long enough to try to pass myself off as anybody with any degree of experience.And getting back to the OPs question, as an investor, broke or not, you still need to get these properties at a price point that makes sense, otherwise you are going to have a hard time renovating them and having enough equity to really quality for a cash-out refi.What am I missing? 

I took some time last night to reflect and figure out what I’m looking for and what I kept coming back to was: I want to use my property to supplement my monthly income and allow me to seize opportunities to purchase additional properties and repeat.

@Corby Goade Very good questions that I probably need to do more reflecting on.

The guest reviews of the property reflected poor management in more than one way.

Furthermore, the return of capital can't (shouldn't) be reflected in the profits since it is a payback of principal and not truly profits.