Experience has shown me that people in foreclosure some times do not think rationally and many times are in denial.What has been effective in the past is to mail postcards to a general area of smaller older houses simply saying that you buy houses and can close at their convenience when they want.

So much and so many different people's paychecks hinge on if they can prove comps.I have also heard it rationalized from appraisers that if someone is ready and willing to buy the house for that much and there are comps (in their opinion) to support it, then that is the true market value.

Due diligence means; confirming what you've been told, analyzing that information and then making a RATIONAL DECISION based upon what you've confirmed.

To simply ignore the experience and advice of successful investors and intentionally make mistakes (all the while trying to rationalize it or attacking the messenger) is crazy.

So you could buy on the equity markets a 'put' (option to sell the investment at a net gain, if the market turns down) or a future (locked-in price for the home market index in your metro region) for 9 nine out to protect much of the downside, like insurance.It looks straightforward enough to buy options "insurance" - some volatility like stocks but well within the realm of rational investing - not a gimmick.

If he still doesn't want to do it, then you can't make him be rational about it and it just won't work.If he insists on getting his payments in cash, I would have him show up at my bank where he can receive the cash and he can go out in public with large sums of cash.

Qualification is based on the front ration, housing expense and the back ratio housing with all other obligations outstanding with 6 months or more remaining to be paid. :)

I'm just trying to get in the game without dealing with guru hype.The issue is that you are thinking rationally and applying that to banks.No bank will want that loan.

Point is, if lenders were pushing the issue on enough of these cases, then someone less rational than you would likely have litigated it, at least to try to get an injunction to stop the foreclosure at the district court level.

Depreciation is also an "after the fact" recognition of the expense, when you SHOULD be reserving for it in advance by dividing the cost of a new roof or mechanicals by 15 years to get an annual "charge" that you are setting aside (or more if the items are already fairly old when you buy).Not saying those you know are fudging the numbers, but just be aware that there is an understatement bias on the part of the typical investor.All that said, you have <1% prop taxes and are in a high rent range in a generally good area with good tenants, so based on this I think I could rationalize 45% for vacancies/expenses, or perhaps just 30% if doing the management AND leasing.