This deal was the catalyst that got me into the mortgage banking industry.

It’s not necessary to stay local for these services as long as you have online bank statements or a solid way to get them to the bookkeeper.

But unlike going to your bank (and getting your local banks CD rates), with these accounts you can shop CD rates nationwide. 

I understand it is linked to a bank but was having trouble discerning how it imports outside transactions not from the partner bank. 

Keep in mind banks still pool forclosed assets together and sell them all together as a group to one company.  

So if he were to rent it out wouldn’t that show up on his taxes and say if the bank finds out and is okay with what would he do with it on the tax side of things would he report it as soon as it it’s in service or what would he do for tax purposes.

That'll help you figure out what direction to aim in before speaking with a bank to figure out how much you can qualify for. 

You may want to share you analysis with a few banks and/or property managers as they will typically weigh in on your assumptions if they are potentially interested in working with you. 

If you are willing to live in urban areas you may want to talk to a local bank in your market and see if they have any incentives or grant loans for certain areas.  

So even if you had a buy out agreement negotiated up front and execute that buy out agreement, the bank would still require him to be guarantor unless something drastic changed on your side financially.The best scenario here would be to purchase and rehab the property using a hard money lender or bridge lender.