A friend of mine put in a bid on a property immediately after it was listed, sight unseen (so like within minutes of of coming up) and the bank accepted immediately.

Once it shows well, I go to a local credit union or State Bank and get it refinanced for 75% of the now appraised value - which covers all my principle and covers the profit I pay the private lender.  

You might want to do some homework, before you just blindly accept what he's telling you.Also, there are some really great people and highly successful investors on this sight. 

Different country but same principle.  

Does anyone in NYC have any sights into the cost and time it takes to have the C/O updated from a legal 2 to a legal 3 family?  

This is the perfect sight to learn all there is to real estate investing.  

It is a falsehood. 1% will only equate to your PITI (principle, interest, taxes, and insurance) being covered by the rental income.

A separate agreement with the wholesaler sets his profit and allows him to remain in control.I used a option clause to give me standing as a principle and not a finders fee. 

I know this is a basic principle of flipping, but for someone whose strategy is buy and hold you can shoot for properties that require some sweat equity but still adhere to the 1% or 2% rule (market rent is acquisition/rehab cost). 

It will reset in February and become a 20 year arm (principle and interest).