Quote from @Nick Wimmel: Hello BiggerPockets community!

Quote from @Courtney Dettlinger: Your equity is not a savings account from which you can withdraw for free.

Anyone prepared to do this should be able to articulate the reason and how it will benefit them.

I just found this group.

Sounds like an interesting project but I am sure there is more to the story.

The guru your son is learning this technique from is likely not telling your son that the deal will almost certainly encourage your son to get an "off-market" deal from a "wholesaler" who is unlikely to properly disclose the details of the property or encourage an inspection. 

If you have ever learned something important by trial and error, then you can probably understand the frustration that you feel when you make a "rookie mistake" or a simple error that creates a big negative result.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Welcome Alana, you will find a lot of helpful people on this platform.

What made you interested in investing in this type of deal?