But I Have few questions about it..(1) he said he want to use part of the money to pay IRS debt of 28000 (2) use rest of the money for addition to the house and than go to conventional financing ...

@Jay Hinrichs --That's a good point, I could act as the agent in these cases, and earn a commission, But what I am really looking for is my own experience in addition to the money.  

Glad to see another addition to the Cincinnati investors.

The additional factors that are at play here is I still have 1.5 years to be able to get FHA loan or 2.5 years for a conventional due to a short sale of my primary residence way before I started pursuing REI this past April.

You might also have marketing expenses with turnover, in addition to vacancy.Jim.

It could be either a coop or a condo - in a coop you own shares in the buildings corporation that entitle you to occupy a specific unit, in a condo you own the physical space. they'll have either maintenance fees or HOA fees as an additional expense, and these can go up whenever the board voted on them.

How difficult can that make obtaining additional financing?

I plan to do work on the house in several rooms during that year, but it would be nice to have the additional income to offset costs from renting a room or two. 

I am looking at renting the master suite out and stumbled across someone interested in renting a room part time so might also rent an additional room like that to them if we can figure out a price that works.Then I ran across a FSBO in a great rental area...

Perhaps could I pay additional $ to HUD to agree to turn on the water...or is there another (legal) way to go about it?