I realize this business is all about relationships, longevity, grit, ideally fulfillment and am willing to put in the work.

It isn't a neg am loan since those don't exist any more and didn't last year either so, none of those scenarios would work for how the balance could be twice the value (Or any factor above the value).The only thing I can think of is that you don't have a copy of the appraisal done when the loan for $3.2MM was done.

Hi Christine,While I personally would not be interested in a property that does not cash flow (or will cash flow after some rehab is done), if you are playing the appreciation game I would make sure that the property at least breaks even when all the costs (including vacancy) are factored in.If you are at least even, you are having someone else pay down the mortgage which at least still makes you some money, even if it is tied up until you sell.

If you're factoring in what the equity build-up is over time, your cash flow, and the amount the property appreciates (be realistic), you can calculate your IRR (Internal Rate of Return) which takes into account all of those factors; not just cash flow.  

  - being able to use projected rents when purchasing a multifamily to be able to qualify- ability to convert properties and increase or decrease units@Abel Curiel - you are correct - rates tend to be higher- normally 1/4 to 3/4% higher depending on factors and timing. 

This method leaves a lot of stress and unknown factors off the table and limits the pool of potential buyers to serious investors instead of dealing with the potential issues of individual buyers looking to buy a owner-occupied unit. 

With scenario 2 you can do a cash out refi on your current units and take that money to acquire more units...ideally utilizing the BRRRR strategy so you can keep growing faster and faster.

Ideally, 1 person would come in and make us an offer, but we'd probably get a better price if we sold them to individuals who specialize collecting in the different areas.

In the future, refusing to move something should be a red flag, and if you cannto properly inspect something, just factor full replacement cost into your price.

Bottom line, due to many glorious unique factors for me there was actually very little difference.