., Canadians can obtain mortgages in the U.S.A.  

Your objective at this point is to get the asset under your control using private funding.

Loans become more difficult to obtain, for the simple reason that the interest rate is a factor when it comes to approving mortgage loans – just study the formula of monthly income compared to the mortgage payment because lenders use your debt-to-income ratio to figure out how much of a loan payment you can handle.

Purchase a B Class asset below market.

Comps do play a major factor in dictating the valuation of the property but like he mentioned, comparable cap rates is what is a large factor which boils down to the rents you obtain.

Seller must show you the contracts if you have shown serious intent to purchase the asset.

well I am not a NPN expert by any means but this is an interesting question so this is my best guess's1. the 189k is all the property is worth.. in reality.. so that's why its listed at that price.. and probably in contract for around that number.2. the seller does not realize you own the 2nd and who ever sold you the second probably realized the value was not there and unloaded it to you.. 3. your in the drivers seat in that this deal can't close without you signing off on your payoff.4. this is a short sale .. the first lender will be asked to take a short and will usually only cooperate if you as the second take no more than about 5k for your position.5. if you paid for than a few grand for the 2nd your in jeopardy.6. if you don't cooperate and the 2nd is in default you can foreclose payoff the first and deal with the asset.. 7. if the seller gets frustrated they just walk and squat stop paying on the first it forecloses and you either pay it off or it wipes you out completely .either way.. 2nds for most folks are pretty risky.. unless of course you paid next to nothing for it and its just mad money.. that you can easily lose. and just chalk it up to well that did not work.

Assuming this is one of your first potential flips, the IRS wouldn't consider the flip to be part of a trade or business yet (recharacterizing the asset from an investment and changing the tax consequences). 

But I think his hard work and rental history is at least enough to see if he's got a chance to actually own an asset with equity and continue paying on the note.

Fees paid to obtain the new mortgage aren't deductible, nor can you add them to your basis in your home.