So year Zero, your very first Cash flow is a NEGATIVE $323,472.If people understood that every investment that they BUY starts out NEGATIVE, then they wouldn't be so hung up about Negative Cash Flows.

Fannie/Freddie loans just carry better rates and terms (in general) so we try to go for those first.Here's some bullet points on how income is calculated with Fannie/Freddie and S-Corps:W2 income – that’s easy, you probably understood that your W2 income can be added TO incomeK-1 income (box 1 & 2) – also pretty self-explanatory, but just in case, it’s added alsoAmortization/Casualty Loss – Added BACKDepreciation 1120s (line 14 & 15) – Added BackHowever….Mortgage Notes, bonds payable in less than 1 year (Schedule L, line 17)- this is SUBTRACTED from your incomeMeals & Entertainment (Schedule M1, Line 3b) – SUBTRACTED from your incomeNon re-occurring Other Income (1120s line 5) – SUBTRACTED from your incomeAnd then they would average 2 years of these data points to come up with your "qualifying" income. 

Nathan, I am not sure that you understood the question. 

I understood that if he couldn’t move it, it would not just be on him to lose the deposit, so I could understand keeping it in that case. 

@Ben Leybovich Understood, thank you Ben!

We have a very hot market in SoCal and it’s understood that fixers will be sold to all-cash investors, all contingencies removed, and almost always above asking.

The issue as to how much work you do personally is not understood by me so I can’t comment on that. 

I took a class from American IRA to make sure I understood it.

To understand the value of your land on empirical basis, you need to understand the "Whole" (the project) in order to understand the "Part(s)" (land value).A closing observation: the value of your land can and should be understood and viewed in relative terms.

Since they understood the situation, it was a fairly easy fix with no issues.