Just like what Johnson said, the house split into two 1/1 units, upper and lower.  

The rent can compensate depreciation.With a median annual salary of $51000, rents lower than $1400 are affordable for the majority of the US population.

It is a higher end rental at $1,500.00 per month so I don't want to paint it all one color like I might with lower priced rentals.

The 2 mortgages are affecting his credit and he wants to unload the first house.In all my researching of wholesaling I've yet to find out how a tenant affects the transaction.

@Pat ReillyYou are mistaken in your understanding of the rules.The IRS does not prohibit an IRA from investing in a transaction that would be considered a flip.  

Level 2 River White Granite and Venetian Gold Granite are two other options I'm looking at...The home is a rental property which I'll either move back into or sell in 2-5 years.This is the wall and floor colorThis is the kitchen with the old cabinets..Cabinet uppers and lowers are going in painted white.You can see where he island will go

If you negotiate a good enough deal that pays you then complete the transaction with the investor to buy the house you have under contract.

If it's already in poor condition, then they don't have that to worry about.Personally, I'd dig a little deeper on this deal and probably would want a lower price to make it work.Good luck.

What I didn't mention is that she became a real estate agent last year to get an "insider" view of the factors going into real estate transactions, including the sometimes unforgiving taxes.  

There are a few larger rehab companies in the area who can afford to flip homes at a lower margin that your typical one-man rehabber/investor.For speaking with motivated seller off the MLS, I think 70% of ARC minus repairs is the best rule of thumb.