(in this case I would have to say $5,000 or more in the bank) Also do you have any other assets that you can use to help leverage a better rate on the loan itself, you see the less likely it is for a lender to lose their money the better rate you will get.

You would need an additional $10K or so of your own cash to cover the excess of the rehab over the loan amount ($3K), the points (about $4.5K), and your holding costs (taxes, insurance, utilities, etc.

The main problem seems to be that we could lose the tenant in 2 years.

However, buying a rental at or near retail is a guaranteed way to lose a bunch of money (in negative cash flow).

However, I would like to point out that the REA has an option...walk away...fine, no deal...everyone loses then.You can't negotiate, if you don't have a spine.

If everything fails and it looks like they are going to lose there home in foreclosure they would rather sell their house to you at a 60% discount than lose it in foreclosure.

I can have a person kicked off of the entire Sec8 program for two years for any lease violation including suspected drug use, not paying rent, not obeying noise ordinances, etc at a property so they have quite a big interest to take care of things as they can easily lose that free money, and they definitely do not want to do that!

While you're waiting to find a lease-option "buyer" who has bad credit, yet a big pile of cash, you are losing rent.

The western union thing is kinda strange, but banks ask me all the time for some kind of fee to delay an auction, countrywide in particular it seems.EMC has never asked for such a fee though and is generally pretty easy to deal with other than losing faxes all the time.

This may have worked for a few years, but many of the people who did this are the same ones now losing their houses.