Consider there's legal fees for foreclosure attorneys ($3k to $10k depending on the state) and carrying cost of capital, so it ends up being a math equation for them.

I am thinking that those items alone could cost 4,000 to 12,000 and plus there are other problems of repainting (there was a smoker that lived there) and other electrical modification I have too do.

I am thinking that those items alone could cost 4,000 to 12,000 and plus there are other problems of repainting (there was a smoker that lived there) and other electrical modification I have too do.

For example, main categories of deal flow, finance, value add, property management etc and punch list of items for each broad category?

Then you have operational items: $850/mo for a 3 bed tells me this is a bit of a lower end area.  

That being said, when we do rehab, we attempt to estimate the costs of the project for the contractor (project schedule + itemized quote) and pay those amounts along the way.

@Dana Carr I don't think that spending much money on this will add to value of the property or increase rents.

Your inspections should carry over, though!

@Ali Kassam one important item to consider when negotiating terms of a loan is the balloon payment.

But you will set out finish needs or other larger items: full kitchen remodel or just new appliances and paint cabinets.