@Patrick Fraire I'd counter at $330k + 1-year of rent for this friend with the contingency that the friend sign a lease agreement with you, which would basically be a pre-paid 1-year lease.

Cash to close includes things like lender's points and fees, prepaid insurance, prepaid interest, and closing costs. 

hi Melida. i currently own a 2 family in the bronx and also bought i using an FHA loan. i purchased a home that was being sold FSBO. he agreed to drop the price 15k off the bat since he was saving the agents comission. i just used an attorney provided by my employers pre paid legal benefit. no agents were used. i am biased but i think the Fordham/Jerome area is a great area to invest.

Very cheap properties however will have a higher percentage as fixed costs for low prices then become a higher percentage than they would be on an expensive property.Also keep in mind prepaids and escrow are not closing costs, its just you funding those items before they are to be paid.

If so then wouldn't the original owner get a refund check from the insurance company for any unused amount, and then you be required to post a years worth of insurance payments immediately similar to your prepaids at closing?  

Start a new asset account called "prepaid rent". 

That doesn't leave much for pre-paid taxes, insurance, closing costs, etc. with a $10k budget.

One PM is over billing me that I have to resolve and one is charging a prepaid fee to the tenant for furnace filters.  

That is where they put in there fees (points, prepaid interest, etc).2. taxes, title fees, state fees3. if they are only lending up to a certain % of the ARV, then you most likely are responsible for the difference between the overall costs (purch, repairs, closing costs) and their loan value.Like I said, without seeing their info I can't tell if that is the reason or not, but my guess is that is why it is so high.

Any payments on the balance remaining from the original loan must be included in the debt-to-income ratio calculation for the refinance transaction.Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan.The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value).All other cash-out refinance eligibility requirements are met.