It’s also worth verifying if Beaumont and Port Arthur have any specific contractor registration or insurance requirements, as local compliance can sometimes impact project timelines. 

“ cash flow returns” almost always compare horribly to a simple bank CD after you deduct for insurance, prop taxes< vacancy, capex, prop management (or your personal time.) etc etc etc. 

Got insurance involved and use that money to remodel the entire inside, and add a new roof.

Several options you can explore to get the down payment capital: Solo401k; HELOC on personal residence or from equity of the SFR; Cash Value Life Insurance Policy; Business Credit; Private Lenders, to name a few.

This was the first property we carried flood insurance on, during our project.

Before you close, can the rent from your buddy and the midterm tenant cover your mortgage, taxes, insurance, plus a bit extra?

And given #3 above, it leaves about 20% of rent for all other expenses like property tax, insurance and other PM expenses like leasing fee, eviction fee and other minor expenses like for e.g landscaping, pest control etc.

Work with your commercial lender/insurer/lawyer/personal banker and see if they know of any interested parties.4. 

Those can indicate poor management, deferred maintenance, difficult and expensive upkeep like ocean front which will bring up issues with rising oceans, insurance, and hurricanes. 

The bay area has many old houses so be aware of what it will take to being them up to code and meet insurance requirements.