There is likely a point to make about the portion or LTV of seller financing as well.Fundamentally, there is a defect, if you will, to the asset or transaction.

If you're computing a post-rehab sales price, you need other houses that are in similar condition.Now, what about amenities and defects?

Also in many states once a latent defect is know to the seller (the bank is now on notice) they have to disclose it to any other buyer.

The title agent they assigned is an idiot and would not respond to my attorney's repeat request to examine the title and lien search work, then 1 day, yes 1 day before closing they said they had a title defect, some typo in the legal description discovered during a survey which I paid for, prevented them from selling.

Having the policy does not cure the defect in title for you since it sounds like the satisfaction of the liens you speak of might have been a result of the last transaction but the satisfaction was not filed.In that case you will want to have the current owner, or you might be able to do it if you are buying the property, sue for quiet title.

If there is water damage that might be serious, they can ask for other inspections and for repairs to be made, repairs are, at that point up to you and the seller to work out.I'd suggest you try to look to your lender as your knight in shinning armor, they protect you from getting in over your head, if the property has serious defects, you might look at something else...but if you're a rehabber, work out the repairs needed.

The registration services do the DMV paperwork, I write the defective title bonds for them.

Is the collateral defective in some manner?

I was about to close but the house end up having a title defect and they had to reforeclose.

No parking is a significant defect which will impact filling it.Welcome.Check out the free Bigger Pockets Real Estate Guide http://www.biggerpockets.com/real-estate-investingLocate and attend 3 different local REIA club meetings great place to meet people gather resources and info.Consider checking out HUD homes for small multi's owner occupied gets first crack.Good LuckPaul