I mean when I visited the city and the area, I didn't feel like it was a warzone or anything, but you could tell just the house quality is just much different than other more remodeled homes and cities. 

You could rent out the home you're in now and move into the new home to get that low down-payment loan, assuming you have occupied your primary for long enough.

I plan on low balling an offer.

I want to create a residual income so I can spend good quality time with my children! 

Unless you are highly leveraged and don't have much "skin in the game" as they say, your cash on cash return will be very low.  

I realized in doing this post that if Zillow were to actually utilize the data that I and other agents have given them that they could increase the quality.  

If you're hurting to sell maybe go ahead and take the hit but if its Low DOM then maybe put it back out there and get some conventional offers that are willing to meet in the middle or make up the difference.

A lot of lenders may tell you the appraisal is free however its not free if you dont close you will still pay for the appraisal typically (its only free and credited back at the end or at the closing table).The other part is to make sure rates are where you want them to be (low enough).  

Hi Connor, This is my understanding on this type of loan.The FHA Loan  is mainly an insurance program by the FHA (government entity) that allows low down payment on the purchase.

I want to build with  lowest cost and good quality, but his fees build on the total cost.