Quote from @Jay Redding: @Wade Wisner -  Most of the notes that we purchase we keep in our portfolio and borrow against them with private capital.

Great question Todd, first red flag is asking for full payment upfront.

. $1500- $960 + $200 IS $340Cash in your pocket after everything roughly $1500-$1160-$340 which is not bad for a 100% financed deal(INFINITE RETURNS)Now, If you ran this analysis on a 1% deal as @Nicholas L. mentioned you will undoubtably end up in the red each month.All the best!!!

Weeks later found another buyer, barely qualified, a pain to work with, does not respond half the time, red flags all over, seller is motivated.

FD came and red tagged the outlet.

I instead look at it as a potential red flag.

I did all my other due diligence like asking for paystubs, W2s, Tax returns, Employment verification, bank statements etc etc and did not see any red flags overall.

I’m surprised that in itself isn’t viewed as a red flag. 

That's aside from a renter placement fee (from a property manager or real estate broker), so with that into account, it could be about $3000 into the red on year one of a rental lease.

Up front fees (outside of appraisal fees) are typically a red flag when dealing with a HML.