Good news and bad newsGood news: your wife's REPS eligibility covers you, as well.Bad news: you need to meet the material participation test with respect to these two properties.

Key: get the seller to agree in writing to subordinate, verify your lender’s lien priority, and build a draw schedule that covers carrying costs and contingency. for a novice first time builder while this is technically possible in reality it will never happen unless the seller has no clue and the lender is more clueless.. or if the lender is a relative. 

I have a contractor who gave me two options:1) Do the things listed above - which is under the budget I set for the reno as part of the due diligence process2) Do all the 'must-do' items, and also replace the roof (roof is 12-15 years old but passed inspection), vinyl siding, cover the existing hardwood flooring with LVP, and upgrade the kitchen - items that aren't absolutely necessary to do now, but would increase the appraisal and reduce maintenance costs in the future.

Where I'm currently struggling is coming up with the necessary funds to cover the 10-15% down payment and remaining funds for the interest payments on the hard money loan, etc..

.✅ The arbitrage is massive — sometimes thousands in monthly savings just from getting a lower rate.Now, the catch:You’ll likely need to cover the difference between the sale price and the remaining loan balance (that’s your “buy-in”).

Do a background check, and raise the rent a little to cover the extra wear-and-tear.What does your lease say about this?

So I will need at least 1 month-s rent to cover it.

What do people do to cover their basis? 

Data Pulling / CompingIf you’re still comping manually:• PropStream• Privy (underrated if you’re in a covered market)4.

.- Strong language regarding locks on bedroom doors- Cover landlord?