But search the listings on VRBO  for instance, and see what your competition is doing....I would bet that over the course of a year you would not be able to justify the cost vs usage, but I don't know your area.

However, a large number of holes in the walls or ceiling that require filling with plaster, or that otherwise require patching and repainting, could justify withholding the cost of repainting from the tenant's security deposit.

If the average tenant stays for two years, then you need to justify if making $9,600 more is worth it.

It's tough to justify paying for all those legal docs on such a small asset.

This one may be viable (depending on if the seller will take next to nothing for it), given that the building isn't in awful shape - much of the process has been driven by neighbors justifiably upset at the neglect of the property.

The IRS can come back and say/do whatever they want to justify it being a flip.

I think a question I have right away is does adding a bedroom add this much value to justify the time and expense?

If they stay at a higher rent, they are justifying them being a bad tenant with an increase in rent to cover that added expense.As a company we reject 70% of applicants right now for new tenants.  

If you spent part of the HELOC to fix up the place, does the rental increase justify doing that?

But it still may be better for them than not buying the rentals at all.But, when someone buys rentals while carrying balances on their credit cards they are playing with fire and will get burned, it is just a matter of time.Where I have seen people get themselves into trouble is with overly optimistic forecasts leading them to justify taking on way too much debt.The other thing to remember is those using financing will never be as nimble as those of us who don't.