Your strategy really determines how you should allocate your cash.But most new investors don't approach investing with the idea of tying up all their cash in a single deal.With $50k, you could come to Ocala and buy a portfolio of several nice, clean already rehabbed houses, using very conservative leverage, and generate a really nice passive income.In my experience, $50k in Ocala for an all cash deal sounds like it may be too good to be true, especially for a new investor.

The security deposit and the prorated rent was allocated from the seller to me on the closing documents.

The really great ones are sought after and can pick who they want for clients and how to allocate time and they are not a dime a dozen.Newly licensed most brokers will view you as a number.

Scott, there is also an issue of expenses off setting applicable income, the allocation of expenses to income generated.

(b) If the records of a series are maintained in a manner so that the assets of the series can be reasonably identified by specific listing, category, type, quantity, or computational or allocational formula or procedure, including a percentage or share of any assets, or by any other method in which the identity of the assets can be objectively determined, the records are considered to satisfy the requirements of Section 10A-5A-11.02(b)(1).

As to the allocation of funds, that may be correct, but I would look closely at the contract to see how that was explained and interpreted.

It is apparent to me that if you are required to invest 10K into a 100 LTV loan, some or a majority of this could be allocated into buying the rate down (by way of discount points).

If there is a set time-period for which an investor will allocate funds, how will you ensure that the proceeds are liquid when it's time to pay off the investment?

Hi Mark, I don't see any allocation towards capital reserve?

This way you as a buyer know the bank will already accept at that price.It is important as well knowing that the bank will not pursue a deficiency against the seller.Sellers have squashed these deals before when the bank will not give them their terms.In that case you can try to buy the note at a discount and then give the seller what they want in terms in exchange for signing over the deed.You just have to know timelines and foreclosure costs for your state to protect yourself.The condition of the property is critical along with lease agreements in place.Your returns can be severely diminished over time if you do not allocate for immediate repairs needed and the reserves needed for capital items down the road.Example you plan on holding for 15 years.Based on building inspection the roof has another 5 years left max before replacing.So you factor in a cost in year 5 for the replacement with an estimate on what labor and materials will cost at that time.Short sales can be great deals if most of the work is already done upfront.If not you can spend up to a year in some cases and the deal not work out.Good luck