I took the time to read it, and was instantly hooked on the real estate business.

You should only invest in deals where you have a blatantly obvious instant equity and/or immediate positive cash flow.

Instantly, you know this person has no staff, little or no help, and limited resources.

But not bad at all.The bank is taking bids for another day, so we'll look at the inside tomorrow and need to make an instant offer if we're interested.

That is an excellent quality to have in REI.In your initial description you said, "I am pleased to say a family friend has chosen me to handle their short sale" This threw up red flags for me instantly.

Anyway we could get this @Joshua Dorkin ? I'm at work right now and can't do much research due to many external sites being blocked (thank god BP isn't!) otherwise I would have suggestions lined up for ya. Plus I...

The 50% assumption is more of an instant consideration for a buyer or lender considering a new or additional unit.The size of your portfolio or units under management.Maintenance is a variable expense.

If you have a 2000sqft house with a $1500/mo mortgage then if you run into trouble $100/mo cash flow won't cover you very well, years of accumulation will be wiped out instantly.

Then there are the issues of misusing terms to slide ideas past, buying under market value, claiming instant equity on a deal and financing blue sky as an acceptable collateral amount.Lots of wild ideas, presented with a somewhat twisted logic, a dash of hype and ignorance of the consequences is where most are in suggesting "creative financing".I do like other people's money over bank financing in some cases, especially in the short term, which can be up to 5 years, but banks usually have a better solution long term.

I can't say for sure, but if your offer is accepted, you may have already made the biggest (and worst) newbie mistake of all - offering too much.In my area, if a house is listed in the MLS and needs "minimal work", it usually sells to an owner-occupant, and they usually pay too much compared to what in investor should pay.Also, realize that the majority of offers made by experienced investors are NOT accepted.If you really made an offer low enough to get you 30,000 in instant equity, your offer probably won't be accepted.