Another option is to raise private money loans for the downpayment and set-up costs of a STR.Above all I would make sure the neighborhood can support two STR.

Build credit history and savings for down payment and closing costs.

If you provide a scope of what you are demo-ing, you may have better luck with someone's experience to comment here, but costs can vary regionally, so a local contractor would give you the best actual estimate. 

Pros I can think of: - higher rent rates (renting by the room) - saving cost and time on upgrade - easier advertising Cons I can think of: - high turnovers  - limited screening - possible wear and tear  

Are there any banks/lenders which would provide some incentives on closing cost and give good interest rates?

Here are the details at a high level:Purchase price: 174,000Closing costs: 2,000Down payment: 20%Rental income: 1525Monthly expenses: 487 (insurance + tax)Maintenance: 128 (1% of purchase price)10% vacancy: 150Self-managingI am not sure what interest rate to use to get the monthly mortgage amount.

Your difficulty and cost will be based on many factors.

I could probably rent it for $750-$1000 per month over what the standard monthly costs are right now (not including vacancy, maintenance, management company, etc).

Purchase price: $252,000 Cash invested: $65,000 PP 252k5/5@ 5.75%Rehab cost- 20kARV 350k-370k What made you interested in investing in this type of deal?

So, does anybody know any resources that I can use to send mail at lower costs?