I will be offering the tenants of said property a 6 month lease, but would like the option to sever that agreement if the property should sell during that duration.

You can use hard money for ground-up development too, but it really starts to eat into margins given the project duration.  

But what the investor wants to know is what the yearly out of pocket expense is likely to be if property doesnt cash flow to fund total expenses and debt service for duration of whatever his holding period is.LA for instance regardless of its cap rate will always have a demand for rental housing... and someone does have to invest there... how or why it makes sense to them is really their issue. 100% financing is not available in every market.

cash flow of (4K+).You'll also have depreciation, but you'll not be able to use it and it will accumulate only as you do not have passive income.Unless you plan to offset income tax from another source (and be clear in what conditions that applies), I don't see how this deal is a good one.Also, if you finance the rehab cost, you will have interest in your holding costs (plus the portion of taxes, insurance and utilities for the duration) - is that factored in your rehab cost? 

It is verifiable fact that few locales have returned better ROI on financed buy n hold than San Diego for virtually any duration (1 year, 3 years, 5 years, ..., 50 years).  

The remaining duration and your "borrowed" fund's duration would also play a factor there... best of luck!

I don't see how you could blame the property mgmt on this one... you left your personal property unsecured in a rental unit unsupervised for a very long duration of time... 

Purchase Price $ 130.000 Improvements $ 5.000 Closing Costs $ 3.900 Total Cost $ 138.900 Downpayment20%Finance Amt $ 104.000 Downpayment Amt $ 26.000 Interest Rate2,00%Mortgage (yrs)25Mortgage Payment $ 441 Loan fees $ 2.000 Cash Outlay $ 36.900# of Units1Total Rent/Month $ 1.400 Other Rev/Month $ - Tenant Duration (months)0 Gross Rev/Month $ 1.400 Gross Rev/Year $ 16.800 Goss Cost/Month $ 618,75 Vacancy Rate4,0%Tax rate: 21%Key ValuesCost/Unit $ 138.900 Capitalization Rate6,27%GRM 8,27 Cash ROI9,25%Total ROI18,03%DSCR1,65Annual Cash Flow $ 3.413 After repair value: 160.000

(Usually these programs require occupancy for a certain duration or else the programs are voided and the borrower is liable for those costs.)In fact, Fannie Mae just announced a couple of months ago that they are now offering closing cost assistance to borrowers/lenders.

I was required to put the hard money loan in a LLC name, and would like to keep it there if possible:Below is some basic information on the property:Purchase Price:     $255KLoan Amount:       $281K (15% down + estimated renovation cost)Loan Duration:      1 YrLoan Interest:        9.5% interest onlyAppraisal ARV:      $457KI've contacted 20+ lenders, including commercial lenders which all have high upfront points and 8%+ interest rates.