If your in-laws were the ones borrowing, it would be OO, but for you, its an investment.No, you cannot write off "lost rent".  

Note: The cost of the second appraisal may not be charged to the borrower. 4155.2 4.7.g Resales Occurring Between 91 Days and 12 Months Following Acquisition FHA reserves the right to require additional documentation from a lender to support the resale value of a property if 1 the resale date is more than 90 days after the date of acquisition by the seller, but before the end of the twelfth month following the date of acquisition, and 2 the resale price is 5% or greater than the lowest sale price of the property during the preceding 12 months.

Borrow the money until the property is renovated.

When brokering, I'm representing borrower and lender.

You can also expect about .5% higher interest rate than if this were your primary residence- again due to risk.Other things to know- you can't use borrowed or gifted funds for your down payment.  

The concern of title companies (especially in the case of distressed homeowners and for short sales) is whether an argument can later be made that a legal closing took place if you did not bring your own funds, or transactional funding, or other borrowed funds.If your purchase is a short sale it will be near impossible to find a title company that will allow use of the end-buyers funds to close on the initial purchase. 

One lender has asked us for a "borrower resume/biography" my initial draft seems a bit sloppy and I am wondering if anyone on here can point me in the right direction so that I can view a well written borrower resume/biography. 

Pulled money from 401k as a loan and borrowed $5k from parents.

(I believe conventional Lenders don't usually let you start a mortgage unless you're borrowing at least $50k).If you're intending to use a hard money Lender anyway, just make sure they give you proper "proof of funds" ie. make sure they've pre-approved you for a "no financial contingency" loan.And try to ensure your Offer/s are so low that you'll still be ahead even if every nightmare crops up!

I have heard of certain lenders using up to 75% of the other units gross income to help the borrower quality for a higher loan amount.