@Quandra Adams - your lender is correct and somewhat incorrect at the same time.  203k's allow for any renovation related fees- such as the HUD consultants work write-up ($400-$1000), draw inspections (up to $350 per and max of 5), title bring downs (typically about $100 per), architect (if your using one), engineering (if applicable), etc are allowed to be financed into your renovation budget. 

I can not express more to use an agent and select a title company and loan officer (if applicable) with extensive experience selling HUD homes.

well first off this being a landlord site.. and a positive cash flow site generally speaking.. most will tell you are nuts to buy this.however if you can get the property to just about break even maybe lose 100 a month or so and you have a prime Socal asset that someone else is paying off your mortgage and you think rents can go up a little.and you can EAISLY self manage based on quality of the unit .. incredible tight rental market.. that mitigates a lot of land lord issues.I mean whats the alternative you go 1000 miles away to make 100 or 200 a month.. is that positive cash flow going to change your life..is 100 a month negative going to change your life.now this is an extreme.. but i owned a home in Palo Alto that i chose to sell back in 91 because it would have been 300 a month negative.. well that negative within 36 months would have been positive.. and i sold for 500k and today that home is worth 3 million.... and once it got positive it probably would have been positive up to 2 to 3k a month coming into the 2010's.... and someone else would have paid for my home.. plus grade A tenants at all times.. being prime Palo Alto.so thats one extreme.. its really only in low to no appreciating markets with tougher tenant bases that turn a bunch that positive cash flow becomes more acute or for those that want to one day live on their cash flow and be in the business of landlording.. thereby acquiring 50 to 100 doors. 

If you are running into such high number due yo wanted to have self contained units, maybe you should look into billing back your tenants for utilities. 

I invest in self storage due to the good returns and the nature of the business.Ultimately you may end up trying a few different avenues until you find the one that you like best!

I've received two applications for my two bed rental condo.

I'm self employed.

So, financing would have to be a commercial loan at higher interest rates and higher down payment expectations.Most investors will want to at least leave open the options of using lower down payment scenarios with FHA and Fannie Mae and Va loans where applicable.

Offer  the property for sale with very attractive financing terms.Create a self mortgage note on the property, sell the building subject to your notes.

I already have an existing business and units ready to be placed so if I could get 40-50 units rented it would be nice to have that income as I prepare for the larger development costs to come down the road.I hope to build a much larger pad where I will need additional permits and then eventually actual self storage buildings.