In other news I going to have another conversation with the owner about the price to see if we can drop this down a bit more for a wee bit of extra coverage so we will see how this goes.

I read that PMI drops off automatically when you reach 78% of the debt to equity ratio but was recently told that this would not be the case and I would be paying PMI for the life of the loan since I refinanced into new FHA guidelines in 2013.

Initially priced it too high at $139,900 and after 3 weeks dropped to $125k (should of started out lower than i did).  

Unless you see upside short term say 400 to 500k in 3 years.. then a small negative for that gain is acceptable just like CA. investors.Although you take on risk of a Minnie bubble and values drop... 30k net gain on a 350k project is not the end of the world..

Structure it where I'll pay in full their CURRENT asking price in 5 years, minus a $15,000 down payment given upon signing the agreement, and minus however much the principal drops in the next five years.

It dropped my overall average, but nevertheless...I was still able to muster up enough work product to earned the lowest 'A' possible....a 90% in one class...and a 97% in the other.

It's possible that values have dropped considerably in the recent past for some reason or another.There's no way to know without doing more investigation. 

Unfortunately, there were so many people in the past that when prices dropped....purchased new homes - showed their previous home as a rental - and once they were in the new home, just walked away from the previous home and let the banks foreclose.

They just didn't know enough going in, the market dropped out, etc, and I do not want to be a victim of this.2.

I just don't wanto to bite off more than I can chew in case my work income suddenly drops down to 0...