Not to dive too deep here but one thing to look out for is sometimes a property can be assessed at a low number for whatever reason (usually because it is distressed which lowers the value).

I’d guess the best goal is to use cash reserves and HELOC if needed, to do an all cash buy on a distressed home, rehab it in the hopes the ARV will afford you to recoup all your capital+ to leave no money in the deal, have a cash flowing property, and pay off your HELOC without the seasoning period that would be required if you financed through a lender to begin with.

Was it a hard money loan on a distressed property?

Rents only really go down for a few reasons: 1) Local economic distress when a major employer moves away and/or population is declining, 2) Market oversaturation, i.e. too many new rentals come on line all at once, 3) Idiosyncratic circumstances, which can't be predicted.Hope this helps! 

The best way to approach distressed homeowners are to find out their goals and educate them on their options with their distressed asset or situation if they are behind on their mortgage. 

It’s a distressed 4 bedroom, 2 bathroom 1650 sqft single family home in Kalamazoo MI.

I'm at a point in my life where I don't mind living in a place that needs some serious work and I have all the tools in my wood-shop to do most of it myself.HOWEVER my realtor inform me that the distressed properties I've been looking at do not qualify for conventional financing so I would need to start looking at newer homes.

The market was down in Charleston, SC in 2012 and the market was severely distressed but the student housing market was under served and rents had been holding steady.

These 2 money makers were both bought very cheap, distressed and full of squatters.

I also have no interest in distressed properties or turning this into a mass-market approach.