What would be the best route when working a pre foreclosure wholesale deal for the first time ?

@Patrick Hughes some sellers like to see proof of funds or a pre-qualification letter (not a term sheet) especially if you do not have a portfolio or track record. 

I would also consider “moving in” prior to refi so you can refi as a PR not a IP, this will reduce interest and could allow you more cash back since LTV can be increased.

It’s like a pre-approved line of credit for property purchase and rehab short term like hard money but much cheaper. 

I was thinking of offering 8.75% apr in 15 year notes?

Ask him what the apr is, that is also important 

In the case that someone does not want to buy with seller financing, we will profit $18,000 for the flipfinancing offered: 0% down, 5% APR, 5 year mandatory refinance with bank.The new owner will pay $1,290 + $390 HOA for a total payment of $1,680, (compare that to $1,600 average rent in area)I will cash flow $1,127 (compared to $440 if rental)At 5 years, when they have to refinance, the payoff will be ~$192K, adding the P&I from the last 5 years, the total return would be $261k

Those 0% interest rates for 12-18 months are a great way to do it but just make sure you understand to the fine print and pay it off before the end of the promotion period since at that time it'll bounce up to 29% or whatever crazy APR they are.

I'm waiting on a pre-approval and a net sheet, but so far it's looking good.

I reached out to a HML I know and he offered me the acquisition cost for 2pts and 12% apr.