What kind of homework or paperwork do you do to make yourself more credible to the bank?

Carlos,Make sure you do your homework on the multi units.

As I do the math, the property has a negative $251 after tax cash flow at the end of year one and a positive $27 cash flow at year five with a 30-year mortgage.If I switch to a 40-year mortgage at the same rate (not sure I can get this, but just an assumption for now), after tax cash flow is positive $498 at the end of year one and $862 at the end of year five.

You need to do your homework, know what you are doing and watch out for the phantom bidders and autioners who hit a bid when one was actually not even made.

First off, your math is off a hair. 70% of $70k is $49k less 22k repairs = $27k max offer which is only $8k below ask price.Second, never think they will not accept.

As a fix and flip investor the most important thing i can tell you is to do your homework on the area that you are going to be rehabbing in.

Do your homework, learn your area.

Just doing a test run on my understanding of the "Rules of thumb" and math skills.

I personally know CA investors using this method, but I have not personally tried it in California so due your homework and contact an Attorney.Lastly, if your friend uses a quitclaim, be sure to check with the escrow agent to make sure this will not cloud the title.

Do your home work - don't expect contractors to go through every house with you.