If you can't look behind walls then you have to budget for the worst.Carpenter ants can do just as much damage.

FYI, your 10% budget for capex is for building reserves and isn't an expense that hurts your NOI.

Honestly, if you consider Four by Four dangerous and you only have the budget to invest in similarly priced neighborhoods, I wouldn't consider investing in the City.

I have a very small budget 55K.

I have a very small budget (50K) and would like to get started with rental properties.

We did the numbers for both and the first property would need too much time and money to the point that it just wouldn't work for our budgets.

Also what kind of budget is he looking at?

House built 1975. 1 car garageProperty After Rehab: 3bed/1 bath (turned into jack/jill bath), 1200 sqft, REMOVED addition and turned section into a large entertainment outdoor deck.The Bad: Budgeted 45k for rehab, ended up 53k.

A budget could very well be blown by hidden mold, asbestos, termites, leaky water, etc.  

I suggest you invest in an attorney reviewed and edited contract, draft the contract first if you want to tailor everything to your side, saves you money also, imagine all the worst case scenarios, over budget, over schedule, change orders, etc. you need to get the CO clause at a minimum pay, say actual hours x fixed rate and major material receipt only plus 15%.