You might not meet the LTV the bank requires, but it may help reduce capitol necessary (house is worth 20k more than you purchased, would only need ~5k added to principal to hit required LTV).- To sell or to keep?  

My loan originator initially told me that this contingency reserve could either be put back towards principal or released to me.

He is principally concerned with the numbers and invests with no emotions.

With those types of properties I am often looking for appreciation as well as principal paydown.

This gem of a book will help you understand the principals of wealth creation.Once you have read that book then read some others such as, "Rich Dad Poor Dad" and "The Cashflow Quadrant" both by Robert Kiyosaki.

The borrower filed for a homestead exemption for property taxes and even though she had another homestead exemption on another property that she claimed as her principal residence--she was obviously making at least one false statement--we had to treat her as an owner occupant when we foreclosed. 

They often have good contractors & you get the Energy Credit a lot faster if its a principal residence.

@Jose CintronThe rent to own business with Sellers or with tenant buyers take some talent and some knowledgeWholesaling is pretty straightforward as far as finding a motivated seller and finding a cash buyer and putting them togetherIf you're assigning lease options I highly recommend you get an RMLO to prequalify your tenant buyers as per the Dodd Frank and the safe actThis way most of your tenant Buyers will get mortgagesThere's also a component of credit improvement to help increase FICO scores if DTI is OKI know Massachusetts really well I grew up in Arlington@Mike Hurney@Shaun ReillyMike and Shaun are been around the block quite a few timesBeing licensed allows you to show houses and market house you do not own to tenant buyers in MassachusettsOnce  you get caught acting as a real estate agent, you get a fine and you get a record against the department of real estate in MassachusettsThen  it's difficult for you to get a licenseIf you want to buy on subject to or wrap mortgage without a license I think you're in the clear because you're acting as a principal and you're getting on titleIf you just get your license and act as a principal you're fine, and also disclose to the seller that you are licensed but acting as a principalIf you want to be hardheaded and do lease options without license, please don't complain when you can not do business in  Massachusetts or Rhode Island or Connecticut or New Hampshire or Vermont, New Englanders talk to each other

Then you can take the value and subtract it from your principal balance (if no loan, then it would be the price they quote).

This has appreciated and it has helped with our taxes and we have paid down the principal, although you don't seem to think much about that benefit