We are probably looking at another $22k or so in debt service depending on the offer price and interest rate.

Better to build your own equity through the debt pay down, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset.

My hope is that the ethical investor will have all their legal paperwork in order and explain any risks to both homeowner and end buyer. 

The kicker is that this person living there then makes you spend additional money to go through the legal process to get them out of the house that you are using to subsidize your living.Hope this helps and let me know if you have more questions.Geoff

I highly recommend their book "Every Landlord's Legal Guide".

I suspect that we will all be waiting a lifetime to see rates back to were they were 2 to 4 years ago.. so I would not bank on that.. as for pricing.. if its a place to live then you certainly can just wait and see.. its not like your homeless or need to move other than you don't care for your neighbors.. markets always slow about now.. what will be telling in my mind is were we are at next Feb March April in the buying season as it were.I was in a conference this week here in Vegas and some of the speculation is that many of the commercial type loans that had 5 , 7 and 10 year calls  are going to stress those that had max leverage.. as the rates rise the cap rates rise to keep pace thereby devaluing the properties.. to the point some of these investors are going to need to bring some to significant amount of fresh capital to pay down their debt to get a refi.. and that will stress those assets and there could be a real buying opp in that sector.. at least that's what I gleaned from the talk I listened to yesterday... hope you find that dream home in the country !!!

Essentially, $60K ARV less the $5K for repairs would put it at a value of $55K or so.Assuming you offer $50K for the property, he wouldn't be able to pay off his debt and walk away with money.You can't lease if he has a big payment due that he can't accommodate.he's in a tough spot.So, $51 is his total payoff amount.

Our LTV is less than 50% ( yes no risk at all for the bank, and we have top credit score.We already paid the appraisal, environment fee, wasted countless hours etc...The texts in LOI: Financial covenants:-- Min DCR based on actual rents for the first trust deed of 1.25:1.00 based on a 25 year amortization by the end of 2018.And in the loan doc---Property is to maintain a 1.25:1.00 Debt Service Coverage Ratio, tested annually.We would not have paid the fee and sign the LOI, had he included the phrase tested annually.Please understand that the loan  will be for 10 years long, and we are very confident that we will always have fund for the monthly mortgage payment.

Possibly pay off some credit cards/student loan debt with any remainder.Cash-out refi and basically do the same thing (i.e. put substantial down payment on another property/pay off debt) .

Does the seller retain the full legal responsibility of the warranty?