On a house with a 235k exit value I'd pay no more than 15% of that value in land and that's making the pretty big assumption that you can sell a 1,750 square foot home for $235k.

Now you have to try to pin down the actual numbers - rents, taxes, utilities, etc. to see whether the original assumptions you made still hold.

Take the time to type it out and I have a feeling people will take more time analyzing/responding to it.Some things to include:Purchase PriceFinancing Terms/Assumptions (down payment, terms)Rents for each unit individually (verify actual rents and market rents)Projected expenses -property tax, insurance, vacancy(5% is too low!

I would say that is a good assumption.

However, being still fairly new in the business I don't pretend to be an expert...especially in the financing end of things...so if my assumptions for the mortgage are way out of whack, please let me know...Annual Rental Income.......$82,200 Vacancy at 7%...................$(5,754)Subtotal...........................................$76,446 Annual Expenses.........Taxes........................$6,962 .........Insurance.................$4,800 .........Gas...........................$5,040 .........Water........................$1,092 .........Sewer........................$3,200 .........Electric......................$720 .........Trash.........................$1,200 .........Landscaping..............$240 Total Fixed Expenses.......................$23,254 Repairs/Maintenance.........$3,360 Replacement Reserves.......$1,440 Management (6%).............$4,932 Total Variable Expenses.....$9,732 Total Expenses................................$32,986 Net Operating Income.....................$43,460 Lets assume a lower NOIin case the expenses areunder reported:..............................$40,000 Financing:Purchase Price..................$400,000 Loan Amount.....................$300,000 Interest Rate.....................5.20%Loan Term.........................10 YearsAmortization......................20 yearsAnnual P&I........................$24,158 Net Operating Income......$40,000 Debt Service.....................$24,158 Cash Flow.........................$15,842 Cap Rate...........................10.00%Cash on Cash Return........15.84%

I told them that since they could change the rules on me , I would do the same with them and I demanded my deposit back with interest and that I was not interested in wasting any more time and money with them and was under the assumption that it was an auction, and since I had won, they needed to honor our deal.

I wouldn't take this deal, and from your comments and assumptions, You most certainly should not buy this.

To ignore or not resolve it would be irresponsible, perhaps criminally illegal in some way if a smart attorney could show fraud.I have, however, purchased a property subject-to an assumable loan and sold my equity for cash, assisting the buyers with the assumption.

Mark Ferguson,“Most lenders and industry experts in the REO field have said the default rate on loans since the new guidelines were implemented is extremely low.”The word Most may be too broad of an assumption.

Assumption vs land contract.