Although it's not as important as Senior Lien status, determining equity doesn't necessarily drive the outcome of the deal but it can protect you in case of default.For either 1sts or 2nds you can also look at where the property is located to determine foreclosure timelines as well, which could be important in the event of a default.

Although you don't have to worry about the risk because everything worked out for you, the risk that you would take in such an arrangement is complimentary to the risk that the seller is taking in trusting the buyer to protect his credit by actually paying the bills and by not leaving him with a destroyed investment to have to sell if you were to default.  

How do you protect the windows?

Also non-recourse loans provide great protection. 

That's unheard of...I need advice of someone more familiar with tax and business laws than me.I have plans and building expertise, my grandfather would invest the capital for me to do this.

I am able to find deals that he can't. because he does not have the time to do so I feel I should make a contract to the realtor but should I give one to his investor also to protect myself?

I'm sure the bank is constrained by privacy protection regulations, other compliance issues, and customer service reps who know and can only work in a certain "box" that does not include the situations investors like you and I face.One situation was a flip for me.

Time to put some of that expertise to work for myself.Very much enjoying my "wallflower" time hanging on BP and reading and learning.  

SF taxes are protected on the $72,000 by Prop 13 so that's all equity in your equity bank.SF  $72,000 + $4320 rents= $76,320SA     9,000 + $2160 rents= $11,160  Plus possible tax increase.You'd have to own almost 7 SA houses to match SF but then you'd have all the additional expenses of roofs and other CapEx.

Seems like they really don't protect my property value but are a risk to my property in that they can take it away from me.Conversely, I was looking through the bylaws of the house under contract and they say in there they require board approval and could implement or outright ban rentals.