The logic being I do not want to reduce the repairs and other costs by the percentage.

After reducing the price further do you really think any of them will still be interested in your low offer which is now even lower.Worse case scenario of not looking at the house and without knowing of any repairs; you usually need carpet, paint, maybe tile, updated fixtures, maybe crown molding, maybe alot of things actually.

What if I could reduce that purchase price to $135K?

That would be the new loan amount at $42,000, and reduce the cash out to $15,700.If the rent supports the loan amount, and the $26,300 includes both purchase and rehab, this may well be a good deal.

You get 4-5 inquiries on your credit report and they think you're about to file for bankruptcy.Also, banks take off 25% of your rental income reducing your net.

If you find a property that has tenants in it and the owner is charging what is about the going rate in your city, it's very unlikely that they will somehow be willing to reduce the price by 30%.

Or are we depending on appreciation to reduce the LTV?

After taking over - increase your income and reduce the expenses and turn it into the proverbial "cash cow".

I would use about ten percent to start, meaning that I would reduce the total amount of rent you expect to collect in a year to 90% of the total possible gross rent.

The new subject purchase wouldnt qualify.Most reduced doc high ltv loans have vanished as well.FYI - Full Doc requires that you have at least 6 months of the expected mortgage payment, inlcuding taxes/insurance, verifiiable in liquid assets seasoned for 60 days.