If it won't cashflow with the higher debt structure on a refi, then you're looking at renting as is, or selling and using the profit for a new property.

So I would be in it $405k making $25k profits from rehabbing then profits from increased rental revenue.

My educated guess is that they are done by local house wholesalers hoping to make a profit, but are they something else?

That goes both ways.I don't like giving away 50% of the profit to anyone.

However, profit from flips cannot be exchanged (legally) so you'll have taxable proceeds at the end (assuming all goes well :) ). 

@Mark HughesAs long as you are not flipping real estate inside your 401k plan, it will not trigger UBIT. https://www.irs.gov/charities-non-profits/unrelate...

Also, there are exceptions to the withholding if: 1 the house is the primary residence of the seller and profit is less than 300k.

The larger issue is that the US government will now make profit off of more people.  

It really makes a difference in the profitability of the investments and encourages conservation with the residents.

There is ANOTHER petition circulating that will confiscate the permit of any property that doesn't generate enough Occupancy Tax in a year.https://www.tahoedailytribune.com/news/petition-seeks-to-tighten-south-lake-tahoe-vhr-regulations-maintain-current-cap/