@Gabriel Meerzo  you don't have much if any risk save a few thousand bucks.... worse case scenario the loan gets called on the sub too or alienation of title.. and if you can't refi its the seller who is going to get burned... not you... you could lose your investment but you really had no cash in it any ways. your just buying 300 a month in come and will work for that income by landlording it.

Since it will probably take me several days to line up new carpet or pad only replacement I may lose these applicants.  

If they did, they'd realize that those properties are bad investments (they lose money or barely break even over time - over the long run).

So the strategy is risky if you can not pay off the first lien, you stand to lose once they foreclose.

He was breaking even/ losing .

@Israel CamposI'd say your biggest mistake might be the decision to not let yourself lose the earnest money. 

Getting it right can be the difference between making a profit and losing money.

I really have been pleasantly surprised by a lead that came from my Craigslist ads that has developed into a huge deal.I have a family that was losing there farm to foreclosure who contacted me asking if I could buy there farm and allow them to stay there.

The worst negotiations is when you have everything to lose and the best when you have nothing to lose.

You must know the numbers on your project thoroughly but if you make a sales presentation you will probably lose most potential investors.