There are numerous BP podcasts that have harped on this exact point.

The property had a very old mortgage lien showing on the title work that has been recently cleared due to it being a clerical error by the county recorder.

You might ask if you could cure the lack of an escrow impound as a good faith error under 1026• 31.

With my overall goal being passive income and longevity in the real estate market, I do not know what will be more beneficial to this end.Here's what the math looks likeInvestor money: 40kHome cost + Closing: 38kRehab estimate: 15kMy cost: 13k (to cover the rest of rehab)Appraised value: 85k (Low estimate to error on side of caution)Investor ROI = 10% After Repair Appraised Value (IE $8,500)Cash out Refi @ 70% = 59,500= 48,500 to investor and then 11k back to me with a 30% equity in property and positive cash flow of roughly $150 or 11% COC ROIThe alternative to this is to flip the property, take the 31k profit (utilizing the 1031 exchange) and use it to invest in something else.I also want to note that I currently set aside 2500 a month to invest in this endeavor.

My error was not understanding the entire chain of events  - in this case, it was the date of deed transfer that mattered in the scheme of these particular liens and my hopes the bank would act on them (except maybe the one that pre-dates the original foreclosure filing - not sure about that one).  

Hi @Ryan Marrero, and welcome.Six months for most scenarios (refinancing out of hard money being a notable exception), but appraisers are going to error far on the conservative side for about a year from the purchase. 

@Gaynor Pendleton, Firstly, sounds like you may have an Errors & Ommissions claim against your PM for their poor performance.Regarding your other questions/statement, I dug into this with some of my insurance companies and can give you the following;1)  Damage by a tenant can be covered under the Vandelism Peril. 

The 21k net is a little slim, and doesn't leave much room for error as others have mentioned.

I am new to vacation rentals but have numerous long term rentals.  

I'd prefer to keep the money to pay the taxes and insurance myself.I would still call the mortgage broker and calmly explain the dilemma due to the broker's error.