In other words on a $50k loan, foreclosure and other costs eat up a bigger percent of that $15k in equity whereas on a $300k loan those expenses make up a much smaller percentage of that $90k in equity?  

@Jose Roberto Funes Jr if the deal was bad enough there isn't a buyer, you should tell the seller you can't close and eat the cost of whatever earnest money you've put into it already.

Derrick:Arctic Char is not bad eating ... just an oiler salmon.A friend of mine studies (or studied) Gurry Sharks (called eqalussuaq by the eastern Inuit).  

Remind them of that when you are presenting your final offer.If they balk,walk out on them and let time eat at them a little and then give them a hard deadline to accept the deal.Never let a seller know how much you really want the property.Make them really want to sell it to you.

If you buy this year and they reasses next year you could be paying much higher taxes next year eating up cash flow. 

HOA's no doubt can eat up a lot of expenses, but you can still make it work like any other property. 

Add court costs on top of your lost rent for a year or more and you quickly understand why it's better to just let them move and eat the cost of finding someone else.

Patrick Philip You need to know if the original loan has any prepayment penalties (which are often 5% of the loan amount in the first year) which can eat into equity.

Good enough equity, trust, and a nice fat n juicy interest rate?

Also a recommendation for a decent servicing company for small loans would be helpful as the payments are not as big so fee's could eat profits easily.