When I analyze fix&flip deals that require extensive rehab, I always wonder if it makes more sense to tear the house down and built a new one.

If the ADU rules for SFH did not exist, I would not shed a tear. 

If the lot is in Palmdale or Lancaster, 400k for a tear-down, depsite the size of the lot seems like a lot to pay.

I think of it similarly to wanting to keep it 65 degrees in summer (only without the HVAC wear and tear). :) I list out that they can't do these things:- Parking on grass- Store campers, boats, aircraft, unlicensed/insured cars, - working on cars, - using any part of the property for business purposes (including childcare, baking)They cannot have:  fish tanks, water beds, fire pits, trampolinesI don't think any of that is too crazy though. :)

Too much unsupervised work for extended periods can lead to a lot of tear out and start overs.

Repairs other than normal wear and tear are billed out at the prevailing professional rate.

we did have some hoops to jump through during the closing process, so jon's experience came in clutch, and we walked away with an assignment fee of about $97,000 to split. while this was MOSTLY profit for us, we did have ~$1200+ in kickbacks to pay out, jon has a team to pay, and i'd invested about $4500 (and blood/sweat/tears) in the mailers. this deal was a huge win for everyone involved:- the seller got exactly the price they wanted, no inspection, as-is, no realtor fees, and got to sell with 2 non-paying tenants still occupying the property- work was created for jon's team, my assistants, the closing company, the attorneys...- the end buyer negotiated some big discounts with us, and now has HUGE potential upside- months of work will now be created for the end buyer's renovation team- the non-paying tenants were offered cash to cover their moving expenses + then some- 3 people got paid kickbacks for helping get this deal to the finish line (2 RE agents and 1 cold caller)- 6 future tenants will have newly-gut-renovated units to live in- the sellers will get to see this building live up to its full potential in 6-12mo, beautifying the town they live in...the list goes on!

If you do not replace these, they will be leaking very soon, and you will need to tear out everything, including your surround and tub to properly replace them later.

Less wear and tear on the structure - The owner sets up the MTR so they are the ones putting in furniture, hanging pictures etc.

The reason this group of people is quite valuable to you as an investor is also because there is a price to pay: I have had may fair share of lost downpayments, 2 week projects that took 2 months and jobs that got left as a mess or so bad that you have to tear is out and start over again.