He is securing expensive debt, not debt through a bank, isn't putting any capital into the deal and structuring the equity investment in a highly risky manner without any upside offered to the investor.

@Kay S.Assuming you are getting title insurance (which I recommend) the closing costs will be similar to a traditional closing.

There's some traditional lenders in there, too.

I always invested in the “higher end of the lower end,” starting small and working my way up so the banks had no issues financing my next property.

I am currently looking for a small local bank or credit union that issues lines of credit collateralized with investment property.

•Set up your EIN and operating agreement.2.Set Up Your Business Bank Accounts:•Open 3–5 business bank accounts to give your money purpose:•Income Account: For revenue and deposits.

Some are because there are serious issues with the property that can't get financed by a bank.

Quote from @Arun Maheshwari: Hi,Does the bank owned foreclosure property allows to put Inspection contingency for big issues like plumbing, eletricity etc.ThanksIf it is bank owned and the foreclosure has taken place - possibly but they would make you responsible to turn on power and water and turn it back off.

There’s a good chance that if lender finds out of property transfer via title records, insurance policy beneficiary, bank account submitting mortgage payments, they’ll assume that John  Smith formed a trust to own title and will not flag the  file for any action.  

You are borrowing money from a bank.