Hold half of the money and use the other half to build up credit so that we can obtain a reasonable interest rate on a bank mortgage for an investment property or another home while using this home as a rental5.

[Side note: In my quest to gain knowledge I just signed up for classes to obtain my real estate license as well.

Albert Einstein said that I believe.Rooster nailed it.You make more money from your knowledge than you do from your money, I said that.If you have knowledge you don't use your money.Add experience with knowledge you don't need money.Now, add in that mix that you have knowledge and experience along with the ability to obtain money, you'll be making even more money.But, when you have money, you have the ability to get more money or you can use your money, that alone won't make much without knowledge or as much as with knowledge and experience.So, the best position to be in is to have money with knowledge and experience. :)

I've saved and bought things in cash.With that said, obtaining financing for a flip project is damn near terrorizing me - though I know it's part of the process and has to be done.Since I am brand new to this area, I still have a virtually non-existent network beyond the few people I've connected with here on BP and those involved from other places.Question 1: While I understand that any lender - primarily HML, is looking at multiple factors when deciding on whether or not to approve a loan...

But, this stuff often leads to over analysis and obtaining useless data, it can be entertaining but not that useful in reality.

The 50% rule seems ultra conservative and very difficult to obtain in the ca market.

It was supposed to have been "cleaned up" and was purchased once in 2011 after the meth problem.My realtor is saying the home still has the stigma even tho it was supposed to have been treated and cleaned and even gone thru a new owner 3 years ago.I have obtained a copy of the Certificate of Illegal Drug Lab Cleanup from the Indiana Dept of Environmental Management.

Not to mention that CF will be harder to obtain as prices go up.

Hopefully your borrower is cooperative and you can obtain the last couple years financial statements from him and hopefully he is maintaining some decent cash flow still.  

At (annualcreditreport.com) you can obtain one free credit REPORT a year, but not your scores...