The memorandum (some use a letter of intent) approach is considered a "soft lease option" because the memorandum is generally a non-exclusive agreement that gives the seller the ability to walk away at any time if they choose to do so (even once you've spent all your time and energy finding a buyer and the seller decides to walk away at the last minute), but also gives you the ability to gain an assignable interest via the memorandum in a way that feels less scary to a seller (and generally you can structure the terms of the memorandum to have the rental payments begin the moment you assign, so you don't have to make payments while you're trying to find someone to assign to).You can also gain an assignable interest through a "hard lease option" that is exclusive between you and the seller, and will usually require you to start making payments at a specified date.

Once you get under contract, then you buy a flight and do in person inspections, walk every unit, explore the market, etc.Also, your deposit is typically refundable for the first 30 days, which is your due diligence period. 

I did an initial walk through of the vacant unit and on the surface, it definitely needs to be updated.

Walk away head down?

Pre approved may be that the short sale was previously approved at a certain price and the buyer walked.

There are a couple of units where the landlord pays the utilities (aka my parents) but when I walked by the property last week I noticed they have window air conditioning units.

Drive/walk/call for dollars, call MFR landlords listing units for rent and offer to take the entire property off of their hands, that sort of thing.

In some instances, no money down can be found but probably not in high end properties but rather D class properties, motivated owner just wants to walk situations.I do private lending in FL.

It still was a good learning experience and made money in the long run.I wouldn't dissuade anyone from buying a HUD home, I'd just say, go in with your eyes wide open, get a good inspector / contractor maybe to walk it with you.  

The property is a Short Sale.PP-$275KARV-$410K - $430K (most recent comp sold for $457K 2 weeks ago)Estimated Rehab Cost - 60K (unable to walk the property until the offer is accepted) Holding Cost - $1200 Per Month (6 month estimated hold)Buyers Closing Cost - 3%Seller Closing Cost - 3%Realtor Commission - 5%I am looking to get the loan from a private investor and will be looking for the loan to cover purchase, rehab and holding cost.