He just took a job out of state and is needing to sell the property, but has very little equity and when fees are factored in he would likely end up needing to bring cash to closing.

If that’s the case, should I be looking into pulling the equity out of the house in the form of a mortgage to help generate a paper loss (I would estimate I could get a 100-120k mortgage).

With $20k in savings and an additional $4k monthly saving rate, I'm navigating my next steps carefully, especially since I value starting with a substantial equity position in any deal.Here are the options I'm contemplating:Invest in a Low Entry Property: With my capacity for a 20% down payment, I'm considering properties in the $100k-$120k range.

Who cares what they think of your situation regardless of if its positive or negative (and it most definitely is a positive).

My goal is to create a positive cash flow, Finding good market and deals.

Can you not force as much equity/appreciation in a townhome because of the market value of neighboring townhomes?

Does the regime fee offset your ability to make positive cashflow.  

It’s weird you almost have to hope you had no appreciation or your return on equity was getting much worse every year.

When they are promoting lending in 3rd, 4th and even 5th position people will lose opportunity and money in new ways.

I think they should always be in a strong financial position, but they should also be contributing at least some of the money.