The average interest rates on the loans are 7.38 percent which is extremely high compared to the interest rates I have on other props that I have just refinanced.

.- I pay the $40K + interest (interest rate comparable to that of stock market or other typical $40K investment) within 3 years, at which point the deal will be done, and I'll own the home outright..- If I'm unable to repay the $40K + interest within the agreed upon time, the investor automatically becomes a lienholder on the property and is entitled to his original investment plus a % of equity returned if any (this % is part of my question, what we be reasonable, given that I'm making the monthly payments?)

I have an option to purchase property from a relative so I am getting a great price on the lot compared to others in the area (1 acre is going for 150k in some areas, I would be receiving 2.5 acres for 60k).

California, for example, is horrible compared to Texas, where the standard to hold a property owner liable for a contractor's negligence is exceptionally difficult.

You might compare cost differential between doing this new and just buying a building with a 3rd unit already added plus cost of rehabbing the already added unit.You are saying a unit value in your building is 55k.

They will look at your actual net income (usually without the depreciation) and compare this to the proposed debt service payment (the P&I part, taxes and insurance are already taken out at this point.)

Lastly, for investors with excellent credit [800+], how do portfolio lenders compare to Hard$Lenders, for purchase+rehab loans, ---e.g. a. pointsb. application or activation feesc.

FACTOR TIME, WHAT YOUR GETTING, THEN COMPARE APPLES TO APPLES.ASK WHERE THERE MATERIALS ARE SUPPLIED FROM.

Our RE is quite affordable and our standard of living is very high compared to other first world countries.

Of course that may not make up for a 20% potential increase but you could build in say a 5% increase and that would keep your properties well under comparable ones with much less headaches.