(rates between 6% and 6.75% with .5 point) My monthly expense would be around $2500 and cashflow about the same.I have the $ for the other 20% + closing but want to keep my up front costs as low as can be then recover my out of pocket from cash-flow (and hopefully increased cash-flow from being creative as mentioned above). 

I don’t want to put myself in a position that if it goes south I can’t recover quickly.

As a wise industrious business owner you must find ways to mitigate loss and often that involves intensive screening .

Are we supposed to eat the $9.95 loss each time?

I’d Atleast make them knit sweaters or bake cookies to sell on the open market to off set the rent loss !

I'm being serious after construction costs etc you could have a massive loss on your hands .. research hard before making your decision.

REP status does not guarantee treatment of rental income/loss as non-passive, to get that you need to document 500 hours of property management.

When the property is sold they will actually have a loss to report because they take the value of the property on the date of the owner's death and can subtract commission, closing costs, etc. 

Keep in mind,...the area is still recovering and investors have jumped at the opportunity to purchase damaged homes at prices that they think are good.....not all of the prices are good.

Due to being transparent the seller called me 4 months after our initial conversation and stated although they will be taking a huge loss they just need to sell it and move on.