He said that most of the time their inability to recognize and adjust for that difference, it ends up creating very poor results for both parties involved.  

Also most deals with higher COC that I come across are lower quality products. 

The 203k is a great option if you are going to be living there and while what @Travis Sperr said is true about the loan amount it sounds more like the banker just doesn't have the product in his arsenal.  

Both times the properties had changed  ownership via a poorly written quit claim deed and could have been contested if not fixed.  

This is what makes it a portfolio product.  

Whether poor or wealthy, people enjoy the sense of pride in ownership, that is why (I believe) investors should not be afraid of looking at all areas of opportunity. 

I think you should buy him a copy of Rich Dad Poor Dad

The deck is in poor condition.

Rich Dad Poor DadRich Dads Cash Flow QuadrantRich Dads Increase your financial IQThe Real Book of Real EstateThe ABC’s of RE InvestingThe ABC’s of PMRich Dad RE Tax AdvantagesThe E-MythThe 4 Hour Work Weekhttp://flip2freedomacademy.com - free e-bookFlip2freedom episode 77[http://www.flip2freedom.com/a-3-step-formula-to-a-successful-balanced-and-insanely-profitable-2012/] - podcast - LISTEN TO THIS TODAY!

If you can put down 10k, consider a dIfferent loan product.3.