The Foreclosure time frame is why HML now want higher credit from borrowers and skin in the game.

Even with flipping if you use hard money the lender will want skin in the game ( money down and points ) to do the loan.The reasoning is if the rehab gets tough the HML wants it to be painful for you to walk versus just handing it back to them.A good contact for flips is J Scott on here.

You typically need to have skin in the game, but at the same time you certainly don't want to drain all of your personal reserves if you don't have to (i.e. if you used up all of your reserves on a traditional downpayment w/a bank - not only would it be gone, but then what's next?

But after reading another post on here about smells emanating from the crawl space.I am wondering now is it more than just smokers smell.It doesent smell like moisture. but I can now tell it is coming from an area between the kitchen and the living room there is a boiler there with a leak. the catch pan is full so most likely the boiler was leaking into the crawl space.as the catch pan over flows.However when I open the door to where the boiler is there is absolutely no smell in there.

I don't have the skin in the game necessary to create interest.

So in other words, even though you might have an LTV of 25% the bank may not let you get back the money you put in as then they will be the only one with skin in the game.

No real rule of thumb to say a discount will be X%, depends on many factors.I agree with Wayne that you'd be better off with private money, problem is they are usually short term, but there are some little old ladies that would love to get 8/9% for 10 years for the grandkids, but that has other issues too.Now, if you're buying a 100K property for 70K you might do a 90K loan and you may get the 70K, the trick is not to go over the market value of the property and show that you have skin in the game or compensate for the skin like a pledge of other assets.

The HML will want some skin, plus you'll likely need cash to cover the first round of rehab, pay interest during the loan term, maybe pay points up front, cover utilities and insurance until the property is sold, and possibly cover rehab cost overruns.

Your client needs some serious skin in the game if your credit is on the line.

That being said they will want you to have some skin in the game.