The debt has made it more difficulty for me to obtain financing in my endeavors (of course I happened to become an entrepreneur right when the credit crisis hit), but ultimately I think I will come out for the better, especially being able to survive the downturn.I am a little bitter towards the higher education industry for taking advantage of my parent's never having had a college degree rationalizing to them that debt was an acceptable and normal way to pay for higher education for your children.

Some are concerned that you'd have to mark the assets down to purchase them, but I think it could help provide some rational pricing, actually, for the market in some of these assets, because we don't have really any rational pricing right now for some of these asset categories."

Show the pro rations for taxes and insurance on your HUD, this will evidence the requirements mentioned above.

So it boils down to confidence in my analysis and domain knowledge.7) Rationally, math is math and unless I made a horrible mistake in one or more assumptions, the numbers do not lie. 8) In my current analysis/screening of properties/deals I am looking for a) positive cashflow;b) operating expense ratio <50%; c) debt coverage >=1.5;d) PE <3;e) Cash-on-Cash of 10-12+;f) BER <=75 (80 at the max)g) I tend not to be driven terribly by the CAP rate if the cash-on-cash is good - in the local market it is extremely rare to find a multi-unit with a CAP >7.5 to 9In our analysis we use an opportunity cost of 8%; a maintenance & CAPX set aside of 10%; and assume a vacancy rate of 8.33% (1 month in 12) ... we try to be conservative9) I do realise that while the above ratios have been fine for us, they may not be sufficient for a potential private money financier.

My feeling is that if we want to do good things for people, there can always be found a convenient rationalization to hang the improvement on!

Unless they get a lawyer and try to file a paupers affidavit you will win if you have all your evidence and explain yourself rationally and calmly.Meanwhile do what I did and focus on the units that are vacant and get them ready so as soon as the other ones are out you can fix up their unit.

It’s easy to rationalize a purchase by saying that you can’t buy for less in this area.

It is hard to be rational when you are emotional. 

To a rational person, if you were paying mortgages of 15%, of course I can pay 7% with ease particularly if I had the properties for over 10 years, and rents went up considerably.But not if you talk to a loan processor.I submitted two mortgages to refi, no cash out, same amounts as before, on the same day.

Another approach you can use to rationalize value would be to reverse engineer the cap rates of similar properties that have sold in the last 3-6 months.