Yes some tightening up was necessary as banks’ guidelines prior to the mortgage crisis may have been too loose, but now they seem to have gone too far the other direction.

I would have atleast an additional 15-20% available for the unknows that are bound to come up.4 In addition to all these costs I would have another 5-10% of the whole project available.

They are already loosing money on it, why would they risk putting more money into it?

I don't know and do not claim to but it is bound to be higher 5 years from now.

You'll have to actually qualify for the remaining part based on other income.Once upon a time, lenders used a front end ratio (PITI payment divided by gross income) and back end ratio (PITI plus all other debt payments) to determine if they would give you a loan. 28% and 38% were the upper bounds.

Also for the maintenance and management fees look to loose one of the units rental income since that is usually part of the pay the maintenance/manager gets.Your analysis does look to be pretty good.

I mean, if it all melts down and I loose my job or can't pay my mortgage, it looks like I can pass the buck on to someone else in this new, no accountability financial system.

I have watched friends that were in great financial situations loose their jobs because businesses where doing the same as your common consumer and are now either facing foreclosure or have already been foreclosed upon.

If the banks decline the short sale, my friend and i are thinking about just walking away. we're both braced for 7 years of bad luck and see it as our last but acceptable option... we're not all caught up in "loosing our home" emotions because we want out.

It's one of the areas in the U.S. that I feel is bound to bounce back.