The struggle I see with this asset is getting a loan that will support a 1.25 debt service coverage ratio or higher.

If you were the realtor for the transaction you could have an issue if you did not have current coverage for the Professional.  

so we know state laws are specific.. but  I would put your insurance company on notice.and always have a vandilism coverage.. if your jsut a one off landlord..

Look at what your coverages include the more options and endorsements the higher the cost.  

The price of the note is a fraction of the $25K UPB, so I'm just trying to figure how I get my $25K UPB paid out -- I'm not worried about ROI in this scenario--just understanding the foreclosure auction process.Let's amend the numbers like this: Appraisal $ 117,250 1st Balance $ 50,000 2nd Balance $ 25,000 Equity $ 42,250 Bid Price (2/3 of Appraisal) $ 78,558 Payoff: 1st+Court+Attorney $ 53,500 Payoff: 2nd $ 25,058 2nd Coverage 100% I draw 2 conclusions from this. 

You have 2 options, you either wait for 2 years of employment and yes, the banker should review your drafts before you file or you can go with a non-agency program, DSC (debt service coverage) for investment property, however you cannot be a 1st time homebuyer on this program, you need to currently own your current home or other property

If you don't have comprehensive Bylaws, I suggest creating them.

They would almost certainly have lenders insurance coverage and before foreclosing would run full title and confirm lien position... and of course they would make and see a title claim resolved if necessary.Anything else and current owner is not enough.

I have single family and Duplexes and I have been shopping around and I am surprised and the differences in price and coverage.

Show the bank based on those numbers how you will still cash flow and have a solid debt coverage ratio.