If you can find that information it would give greater insight into how much downside you could potentially be exposed to if the tenant doesn't leave as agreed.  

With that kind of acquisition strategy, it might benefit to utilized a delayed purchase because most lenders struggle to underwrite deals in the span it takes for the auction to close.If you do it delayed, you can stay mostly liquid, then follow up the purchase with essentially a cash out refinance of the purchase price with rehab funds being put into an escrow account as well.Would be happy to explain further, but my clients that operate that way tend to prefer that method to keep getting their cash tied up too much. please explain further sounds phenomenal Jacolby,You purchase 100% in cash, then you do a refinance of the purchase price (usually about 80-85%) and treat it like you would if you were 'purchasing' the property again (so downside is additional closing costs) and add the rehab escrow to reimburse for the rehab being done.

Downside: It means parting with more cash upfront.

When someone spends $40,000 on a mentorship program, and an additional $50,000 in operating costs, and it doesn’t work out for them they are a lot more cognizant of how the program PERHAPS wasn’t as portrayed.The biggest problems, imo, are two.

Like other asset classes, the home appreciation has been a savior for poorly managed NPL's because your downside risk was being protected.

The downside with Heloc is that the rates are in the 12-14 and its not fixed as they are adjustable like a credit card.

What are the downsides?

Biggest mistake I see first-time buyers/investors make here in Denver and Colorado Springs is taking too long to buy or not buying at all.If you're young, time is the biggest money-maker for you, not buying the absolute best deal.

If so, I have done it, and its works out just fine and I didn't see much of a downside. 

Biggest take away is finding a location or a property that you can run the numbers on any renovation or market to check future ARV/equity.You want to have equity built up in the shortest amount of time to try and refinance to take cash out or take out a Heloc.