I've made a typical mistake but the properties are new in excellent areas.

To make matters worst, the products once available in the sub-prime market ceased to exist.

Consider giving this some more thought before you jump into what might become your worst nightmare. ofgift worst

Well, I imagine the OP has finished and sold his project already, but I'll throw in my 2 cents for the next guy/gal...Knockdown (or ANY) texture is probably the worst possible choice for bathrooms and kitchens.

In other words, if you know that they bought it at 42K, they paid too much, don't make the same mistake, don't be the bigger fool.

Worst of all you aren't building any equity...which is one of the biggest benifits to home owning.I could be 100% wrong, I know I don't have all the details but in general its a fairly risky type loan.If you are absolutely certain about being out of the house in 3 years...an ARM might be a better option, as someone else suggested.

I'm also going to try the " drive around the best hood, and find the worst house for sale " technique.

I just feel like I'm still lost and I don't want to make mistakes.

Going in you want to expect the worst and use this to negotiate a lower price.

The common mistake, again, is that a wholesaler buys the house at numbers that are a deal and then tries to add their profit on top of the numbers that make it a deal.