I've also been considering the same scenario I described above, except instead of HUD I'd be buying from wholesalers.

I can describe a museum but you get a much better idea if you actually go to the museum and check out the art there.

As above, the price-to-rent ratio is very low in markets like CA and NYC.The concept you are looking at is Cap rate, which basically describes what your potential yield would be on an investment if you paid all cash.

@Guy Gimenez   what you describe is the law here in Oregon.. once a home inspection has been done its always sent to the seller... that is SOP ... and once seller has it  they have constructive knowledge and if the deal dies and they don't address some issues and it ever gets brought up again then the seller will have liability.  

Right now you're estimating around 35% total expense ratio with property management in place and properties that must be older based on the area you described and the price per foot.If you lower your estimate of rents to market and include a budget for cap ex, your expense ratio + cap ex will look a lot more like 50% of gross potential rents which is close to what it will end up being over the next 20 years, if you keep it that long.

Can you recommend banks that will do the cash out refi loans described?

Landlord-tenant law (RCW 59.18.260) requires that if landlord collects a security deposit then the lease or rental agreement must be in writing and describe the terms and conditions under which a deposit may be withheld.

It would help more if you would describe what you are trying to do.Example:Property type: Residential, commercial, multifamily, etc.Price range putting 25% down - 500k, 1 million, etc.Your are buying yourself or with a partner??

Get another couple estimates for the work you described.

As already described above, it can turn out to be more work for the contractor.Paying for materials directly is another matter.