So what I would say is I’ll lend you the money but I don’t want to carry the risk of loss.

Your total loss is $4,800 but you've only set aside $1,500 for maintenance and vacancy.I don't know your situation but for an average investor, I would say this is a weak deal.

Andre,If you put in a claim they will want to know the cause of the loss.

Just be wary of it in the future as you get more properties and if those properties are a loss on paper (tax write offs), then you may eventually run into DTI issues. 

International deep pockets are always looking for opportunities to play in U.S. market.They famously overpaid and ended up selling at big losses.

Just some food for thought.

Due to the current economy, we'll probably be waiting until late summer/early fall to start writing offers, but in the meantime I'd like to spend my time networking, researching target areas, and analyzing deals for practice.I understand that several investors will recommend buying locally first before expanding out of state, but I am of the mindset that (1) I do not wish to sink so much money into my first purchase, (2) I may be less risk averse than some other newbies, and (3) while no one wants to have a bad experience or investment, I'm willing to look at it as a learning experience instead of a total loss.

In the secondary market, some loan scenarios are being priced at a loss meaning servicer needs to pay the investors to buy the loan.  

Add loss of rents coverage, so if you had a loss at the property and it becomes uninhabitable, you can receive "rent" payments while you are fixing up the property.

For $4M you could literally live in a castle in beautiful Summerlin in a brand new construction home in a gaurd gated community with manicured streets and Whole Foods and 10/10 schools nearby.