Given the expected appreciation, what is your expected total return if you hold it over the next 5 years.Can you cover the large negative cash flow, turnover costs and maintenance from other sources?

Our underwriting focuses primarily on the property's return on investment and/or cash flow, rather than personal financial details.

That is a dollar for dollar return on principal paydown.

Also obvious to me is this property will not produce a return that warrants the effort. 

He is very good about deductions on tax returns so his income looks negligible and of course banks wont talk to him about loans.

Leave you with one last question: Does your reports from any software tie in to exactly your tax return? 

I have a friend here who has about 140 houses right now, who I was discussing return on equity with.

As loans are offered on preREO at a discount, a payoff or reinstatement would typically generate a good return for the preREO investor.

They should be able to determine the COC, annualized return, estimated ARV of a BRRRR, accurate rent comps and more.

If the deal is good enough their may be enough returns to pay investors as well as yourself.