Of course unless your buying defaulted notes at the get go then again as Chris mentioned this type of fee should be handled up front.. and if it new origination your making and then they go bad.. in your foreclosures you can charge the borrower these fee's when they cure or add it to you opening bid and when someone buys it at the court house you get repaid..

I’d recommend a consultation with an attorney specializing in these, in addition to an accountant.

Looking at this as a strategic addition to my portfolio.

This practice also frees up more money for lenders to use to fund additional mortgages.In "non-conforming loan" world, anything goes.

Additionally, I would suggest you run some financial calculations such as cash on cash return as well as any appreciation from the asset if/when you sell.

These are professionals with additional training and a stricter code of ethics.

Unless the borrower is self employed and takes a lot of expenses to show lower income on their returns then it usually makes sense to pay a couple thousand a year in higher interest (you can pay like 4,000 a year in additional interest for DSCR if you are saving 30+k on your tax bill kind of math lol)

What else i should ask inspection to look for in addition to below.

Many lenders also impose additional requirements such as owner-occupancy, and/or that one lender make all of the institutional loans in the building.- Valuation: The variety of financing products available as individual tenant in common loans remains limited, and the terms are generally less favorable than either apartment building loans or condominium loans.

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved).