You will have to assign a portion of your purchase price as land value and a portion as improvements.

@Brandon Richards - looks like you are combining two products and you are talking about Homestyle as well- however there is no limit to the amount of work expect you cannot exceed 50% of the "after improved value".  

I don’t know that I would reduce your capex to 5% - even though they did a lot of capital improvements, the problem with a lower priced investment is the cost of a new roof/furnace/appliances/whatever represents a bigger percentage of your income.

The only reason I could see paying more to principal is if you didn't have 20% down and you were trying to get to a point where they would remove PMI from your payment, thereby improving your monthly cash flows.  

But with buying out the neighbors , road improvements , stormwater ponds , water discharge easements he is looking at another $250,000 on the low side , BEFORE he digs a foundation .  

As an opportunity to improve and learn from my mistakes.

I have seen rehabbers increase the value of a property by $100K by making $50K of improvements.

After a year or two of some improving I want to refinance and hopefully buy my second property.

When the market improved I sold it to my renters at a discount and it worked out pretty well for everyone.  

Just explain that you want to learn & improve your processes & are looking for feedback to better serve your customers.