I guess a lot of Scott's buyers are under water the day they sign a loan, so he must be regularly evicting and reselling some of those houses.

Forced appreciation allows me to build equity from the beginning of the investment, so if I need to firesale for an unforeseeable reason, I will likely not be underwater. 

The other thing to note is most times Pref equity is pretty save assuming a 10-20% market correction but in 2021-2023 we saw a 30% correction meaning pref equity in deal specific deals were underwater without any options.

Forced appreciation allows me to build equity from the beginning of the investment, so if I need to firesale for an unforeseeable reason, I will not be underwater.- Debt-Paydown is a result of time.

@Bijan SabbaghiYou don’t that’s the challenge - we pull data from several places as a note holder and for example and currently we see less than 20% actually going to foreclosure as most are ending in bankruptcy right now due to borrowers equityThe ones that are under water are typically going back to the bank.Best bet is to find properties where deceased or maybe divorced to get higher chance of actually going to foreclosure

I'm underwater with my mortgages and credit cards and bills.

In that scenario (right now unlikely for the next few years) you may get under water if you didn’t account for it.I never found a bank that would do fix rate for more than 5 years.

It usually means a company is underwater and trying to determine how many pennies/ nickels/dimes/quarters on the dollar they will be giving investors as if they gave full redemptions to everyone they would run out of money and most funds are pari passu. 

Surprisingly, for some of the complexes the market valuations slipped to under 50% and therefore those properties were underwater, even with "only" 50% debt. 

This book will help you learn how to underwrite.With the little information you have given, this purchase will be underwater.