@Mary MitchellWhat a fantastic explanation, I was in between terms here and you illustrated it for me very clearly.

@RonS5 Ron, would you please post a simple example to illustrate your 87.5% recovery calculation (i.e., to determine whether you would bid as a junior lien holder in a senior sale)? 

Everyone looks at the graphs and models over the last so many decades and comes to a conclusion of what we saw ..well that might not illustrate how bad things can actually get .

Never say never, right, but really, you'll probably win the lotto first.Let's use some numbers to illustrate how this could work.

Check out NC GS 42 on all of the specific requirements for completion of the Option agreement, including font size requirement, as an illustration.

Just simple easy math.So lets look at this on the equity stripping model...again....simple math not showing totality, but just trying to illustrate....Purchase price $100,000. 

Hi Bob,I appreciate the tongue in cheek illustration, but some context around that would be helpful.

@Tracy MungerPurchase price on a 3/1 = $47,900Rent = $900 (might be low, but again i’m illustrating the difference in the numbers)Vacancy @ 10%:$90.00Repairs @ 10%:$90.00CapEx @ 10%: $90.00Water & Sewer:$75.00Insurance: $70.00Management @ 7%:$63.00P&I: $328.15Property Taxes:$138.67Total operating expenses = $616.67$616.67 + $328.15 = $944.81 monthly expenses$944.81 - $900= -$44.81 negative cash flow50% rule is $450 + $328.15 = $778.15$900 - $778.15= $121.85 Positive cash flowThe 2% rule says I’m getting 1.79%I realize I’m factoring water in there at $75, which the 50% rule likely does not take into account.

Chart 1.1 – Total Investment Overview illustrates visually how much interest your investment will generate by comparison.

I also deleted some names, addresses and content to maintain my clients privacy (who has given me permission to use this example for illustrations): __________________Thanks for getting the property information to me quickly.