Would it be better to add a water reduction plan or get the building sub metered.

I use annual cash flow + principal reduction / cash investment.I also like the the cash ROI or COC calc of annual cashflow / cash invested.  

That either adds costs on your end or doesn't allow you to ask for a origination reduction.

Again, these loans are for the banks largest or better customers, somthing small investors won't have to worry about.Individual hard money lenders may partner in deals as well, for the same risk reduction benefits, but they will probably charges as mush as the market will bear.

I'd imagine things have gotten quicker since then due to the reduction in short sale volume.

Just a rate reduction, not a balance reduction, would help.

He then told me because of this, he's going to have to reduce the price by $4k, to go back to the family and tell them of the price reduction and see if they're still interested.

Not only am I making more cash flow, but I'm also getting a bigger tax benefit, appreciation and principal reduction since it's a more expensive property.From a high level, this makes sense based on these two wealth building principals:Higher and better leverage.

If people met my price ($900,000) instead of negotiating a 5% reduction that's $45,000 that I didn't forgo.

The reduction in the rent they want for their services are often way off base for the actual quality of work they do.3.