- Do their cash flow projections indicate that they will remain solvent or require additional capital injection at some point prior to profitability?

Leaving $70k on the table by not injecting $30k into the property seems a bit rash, but seller's do weird things.

This is why a lot of investors who don't have much of their own cash to inject into the deal don't do FNMA REOs.

While I don't get the quick cash injection that I could make from selling at or a lesser price than the other dozen (12) homes in this small town, I could still make a sale and reduce my management need.I would ordinarily do this contract with a typical 3-5 year balloon, but in order to satisfy cash flow desires, ease of management duties, and to make home ownership achievable for this couple, I am considering these terms instead:Sale price of $55000.Interest @ 10% amortized at 10years.Payment Term 10 Years.Result: 120 payments of $727 = $87,219.  

It's injecting value right back into the hard earned currency of the east coast.

The bank is now telling me I can use any expense during this as part of my equity injection?

My labor, my capital injection, my running things on a day to day basis.

And it can scale with the amount of debt and equity injected into the deal.

IN OUT INITIAL 29648 <<-down payment and closing costs 2009 -2100 <-3 months 2010 -3667 2011 859 2012 11005 448 2013 7985 2014 3244 2015 7405 2016 587 2017 -25965 2018 5710 2019 -9448 <-3 months TOTALS 40653 -14942 WALKAWAY 85898 Total holding period 9.5 years IN=injection of cash from owner's savings OUT=cash flow of building

If it happens right away, you will still take a kick to the cash flow ... or, if you have not managed to build your contingency, you may need to inject more capital into the property.In our operating expense calculations we allow a 10% maintenance and CapEx set-aside each year ... unless we are buying a property with known higher amounts of deferred maintenance, where we sometimes use a 15 - 20% set-aside.