There will be late payments and defaults etc.

I had to borrow the down payment form my parents because I was BROKE. 

Those typically seeking $30-$50k are for down payments or second position liens. 2.

Then Joe sends a letter to Bob and says I bought your mortgage make payments to me.

I guess to get a definite answer I'll have to cold call to get see if all these people are behind on their payment or it's just a standard practice behind some salesmen!

For a sample, consider a $295,000 project with a down payment of 5% and a mortgage payment of 7% interest.Good luck!

There are tons of loans out there that use just the projected or actual income from a property vs the payment of the property (DSCR loans). 

At this point, instead of continuing to pay the interest loan payments on properties that we will never be able to financially finish since the rehab loans will not cover the actual cost of the rehab, I wanted to know the ramifications of returning the properties to the loan servicer, deed in lieu.

If you're expecting property owners to sell their home to you at a discount, you'll need to earn their trust - whether that be by demonstrating a successful track record with purchasing/selling similar deals OR by meeting them face to face and separating yourself from the dozens of local investors and realtors.Lastly, I'd recommend searching past posts related to this topic as well as checking out books related to your target investment strategies.All the best!

I'm sure Pace is smarter than me when it comes to real estate, but I don't have $5000 worth of trust in his ethics.