Even this is an incomplete list.Worst of all, the main reason not to make this loan is that you will not hold a first position-lien against the property.

It is balance sheet heavy but for some reason, most investors in BP are just focused on P&L and they stick with these free accounting platform that doesn't even utilize the Balance Sheet.A lot of the time when I clean up client's books, it's mainly in the balance sheet that needs to be fixed up.

But I see no reason why this can't be done by someone like Scott, or anyone who is successful in any real estate endeavor.

A tenant has no reason to provide liability coverage to the landlord and the rights given to an additional insured.  

This negative equity position is one of many reasons that adding ADUs in a single family zone is not typically a good RE investment.OP whatever you decide to invest in, make sure you do thorough and conservative underwriting. good luck You’re right in that the level of underwriting I presented wasn’t institutional level - but for your average person just starting out, institutional grade analysis often makes the thought of investing overwhelming.

You could structure the deal with seller financing to bridge the gap.Possible offer structure:-Purchase Price: $170K - closer to actual value-Down Payment: Low or zero down to conserve cash-Interest Rate: 3%-5% - or better yet, 0% if the seller will agree-Monthly Payments: Interest-only or deferred until the sale-Balloon Payment: Full payoff in two years when you sellIf he wants $200K, you can still make an offer of:-$170K purchase price + $30K as a second lien due at closing-Seller carries $170K at a low interest rateHe would feel closer to his number, but you still keep within reasonable investment limits.2.

Drop your choice in the comments and share your reasoning!

There is a reason banks don't make loans on stocks.

@Benjamin AakerSure, there are a handful of reasons this was overlooked.

It would seem having a set of plans would be very important for many reasons, like emergency plumbing or electrical, etc."