Forget "renegotiating" if it's a short sale or REO, I haven't had much luck there....standard sale ya, you have some wiggle room.

yes, the 4.5% fee hurts, but if you plan to have a lot of profit from other properties on that year and the next, you deduct that fee on taxes.

You do a full premium rehab or just standard rental rehab?

@Sabino Gonzalez , I am not an expert in taxes like @Steven Hamilton II , but here are some thoughts.First I believe a subchapter S is the preferred company to do flips in so you can avoid some of the self employment tax.Next have your friend give the money to your company, he will want a written agreement, then after your you sell the property have your company issue him the check for his share and send him a 1099 showing what you paid him.This shows the expense to him for using his money, and is a deduction for you for your cost.

My (NON-CPA) understanding is this:2 years ago, you could:-Write off the up front mortgage insurance premium-Write off the monthly mortgage insurance premium-You were "grandfathered" into these rules if you bought your home using FHA back then, so you can continue to write off the monthly premium-MIP falls off at 78% of LTVUsing FHA today:-Up front premium no longer tax deductible-Monthly MIP no longer tax deductible-MIP NEVER goes away, regardless of LTVAgain, I suggest you consult with a licensed tax advisor to confirm all of this is precisely accurate.

Basically if you end up FT at a REI, his take on it was you can have phenomenal advantages by being able to access healthcare for your business as a group (you and spouse qualify as a group) and deduct the expense.

All of my financing so far has been standard bank loans, or creative bank financing with non-standard loans and equity lines.

By all means if you decide to take this endeavor to the next level let us know.While James may say its not a way to go some investors do well (small to James standards $2m a yr) but large to most.

Here in Northern California, with standard ranch houses oftentimes pushing $1mil or more, spending a couple thousand on staging is not unreasonable and is quite common.

You only have to pay 8%-12% of your gross income on said property and it is tax deductable!