Pros:- Ability to make offers at a significantly reduced price point- Significant reduction of monthly expenses (larger monthly cash flow)- Larger equity position (can be used for potential future financing)Cons:- Larger upfront cost- Lower ROI/COC returnWith these pros and cons in mind, and as much as I love the idea of leveraging real estate, I am not comfortable with neither the economic state of the US nor the current position and uncertainty of banks.

But the risk also goes up.. when markets here belch a little bit the higher end houses can see price reductions that are significant.

Most sellers would rather give you a credit or price reduction before placing money in escrow for repairs.

I think the fee was 1/4 the reduction amount if we could get the assessment company to reduce it to a level we accepted it at, 1/2 the reduction amount if the town reduced it to our satisfaction, and the entire amount of the reduction if it went to the state board.

@Kim Durst Actually, as long as the cash out of pocket as opposed to it being baked in the price is not a problem….I would Much prefer to take the price reduction and fix it myself.

Odds are you can do a cash out asap but will have to be subject to the purchase price not the appraised value, and expect additional leverage reduction in LTV. i.e., not 75% ltv max cash out. 

Your cpa can give you the best idea of your tax liability including capital gains and recapture of depreciation as well as potential reductions from capital improvements and unclaimed losses.

It was a hard pill to swallow at first but then I directed my energy to like minded NPL investors to strengthen our buying power.

Considering FHA due to new mortgage insurance reduction (0.7% yearly), then refinance once getting to 20%- Closing costs 3%, 36k- high cost 100% necessary renovation (boiler, etc.) 30k.

I'd strongly recommend to DSCR borrower's to not take max LTV if they don't have to, and stomach the 5% reduction in leverage in exchange for significant rate reductions (50-125 bps+!)