Also, the amount you put down has no bearing on the cap rate, only on the debt financing and ROI.If your maximum cap rate you are willing to pay is 8.5%, then the max offer price should be $277,000.

Jon,I've heard of some private lenders creating a trust that holds the property until the investor refi's it out - thus eliminating the need for a foreclosure should the investor fail to perfom.

An investor friendly lender or mortgage broker is going to understand that, and work with you to get the loan.For commercial properties, the ratio of the NOI to the debt payments is called the "debt service coverage ratio" or DSCR (or some variation on that theme.)

The info on what to eliminate from the rental prior to inspection saved me far more than the cost of the book.

But until that day, its a bad debt you're unlikely to collect.

If you have enough income to service the debt at a ratio of 1.20+ then the borrower (sponsor) is secondary.

There is NO place where the money can be used for other than narrowly defined needs, and owner debt is NOT one of them.

We have about 30K in low-interest (2%) student loan debt and 5k or so in credit card debt.

Christian,I don't believe your comments are entirely true.The was a federal act passed in DEC 2007 the lenders cannot hit you with a default judgement on your primary residence keep in mind the irs can and will tax you on the spread in a short sale and one morning you will wake up to a 1099 in your mail boxOn the contrary, House Resolution 3648 prevents home owners from being taxed on forgiven debt.

Last I checked (correct me if I'm wrong), consumer credit card debt was at $1.1 Trillion and rising.