$20K in additional losses might make this deal a no go according to the investor who owns the REO.

If you're buying them at around 70% of what they'll appraise for that's a good option for a no/low money down deal also. 

She has the equity in the house in order to take a line of credit or re-fi in order to get the construction loan and in my mind, if legally possible, it's a no brainer.I used a tool called "Cover" which was looking to market to me for their services, but it did reveal that I can build up to a 1200 unit in our backyard.Hoping I can get some insight here as I am just starting to learn more about REI and this particular application is slightly more complex.Thanks

Apparently, the difference (between a 'no' and a 'yes') was the insane amount of information/paperwork/etc. my loan officer submitted (plus the bank knows her well and that no surely helped also). 

I am thinking about removing both tenants asap and trying to get the smoke smell out but removing all carpet, whipping down down every surface, getting ducts cleaned and running an o-zone machine if needed.

If you present this cut and dry of course it’s a no.

@Timothy HowdeshellI have my MBA In OperatIons Management from a no-name institution and spent $20K all-in.

For me it has always been a no brainer to buy, but run your own numbers. 

We had a "no pets" lease on our home, managed by a local office of a national property management franchise.  

I just bought a foreclosure property and tried a cash for keys and it was a no go.So I call and left messages with 4 eviction lawyers only one called back.