I did hear on one of the videos I watched to try to purchase off market. 

The biggest thing that sticks out to me is, if the property is in good enough shape to qualify for a conventional mortgage, there is a larger pool of potential buyer, so there may not need to be enough spread between purchase and ARV.

I’m looking at purchasing an old single family house on a 25x100 property with 25’ of frontage on Summit Ave. in Jersey City’s Heights neighborhood.

From the few calculations I've seen probably only makes sense for larger multifamily and commercial properties with a lot of fixtures. 

@Victor Olaniyi I would go to as many local meetups as possible so you can meet agents that are actively seeking business in the areas you want to purchase in.

Lucy,It does look like you are referring to the minimum interest, or prepayment penalty, of your existing lender as well as the 'seasoning' period of any potential new lender.Most HMLs won't have a prepayment penalty on a rehab-bridge loan, but a lot of long term refinance lenders would require a period of time after you purchase it before they would take the new 'after repair value' (or, seasoning).

I live in California, and am looking to purchase my first rental property in Illinois.

Which by the way, will still allow you to purchase more property and add to your depreciable basis that way.My two cents would be that it is a no win scenario trying to please a buyer with improvements. 

During the Great Recession I found my two-story house which I had purchased from HUD for 72K was suddenly under water.

My wife is an investor friendly Realtor as well, we'd be happy to help with any purchases you plan to make here.