Would it be worthwhile for me to still buy properties now even with a downturn being foretold, or would sitting on my cash now be better and waiting for lower prices even though rents would also potentially be lower?

The rent in Washington is not that much higher than in Texas.By purchasing a property well below market value you can make money, but you still may not be able to generate a positive cash flow.

A new partner brings $X,000 to the table and they get an option to buy the property as a price that is below market.

Having the written inspection and an estimate (broken down) give you hard facts to help negotiate vs a gut feeling the price should be lower based on what repairs might be needed.

Which of the below strategies would be best?

(get the deal from the lender)Mortgage balance 20% below FMV?

While even these "star" markets will be working their way through a period of price adjustments or a lengthier listing period at least their core fundamentals are sound.Those home owners who are unable to pay their upwards adjusted mortgage payments and who have not been able to re-negotiate their loan terms with their Note holders will assuredly become "tomorrow's renters".It's already started in many areas... rental availabilities are rapidly shrinking = a strong potential for investors willing to build SFRS for rental or for "sale" under Lease with Option to Purchase contracts, 2-4 unit multi-family and new apartment complexes.In Myrtle Beach and parts of Charleston (SC) developers of recently completed condos are now replacing unresponded to FOR SALE signs with "Lease with Option to Buy" signs and are now actually seeing evidence that strategy is WORKING.Savvy real estate investors are targeting "spec" builders with unsold inventory that has become a "money drain" in terms of interest carry and are buying SFRs for 10% - 20% below actual cost to complete.

I bought my first home this past year, a single family, which I got for about 60k below what it was appraised for.

You can also click on the link in my signature below for more information and tips.

If LTV remains below 70% or 75%, how much higher are hard money loan interest rates and closing costs as compared to conventional loans?