I used to think that most investors purchasing mortgage notes were clueless as to the mechanics of how it worked.  

In the industry this is most commonly known as a "Fix and Flip" Loan.We are correspondents with dozens of lenders who offer this type of loan.Most commonly, the loan will cap out at 75% of the ARV (But Investors do need cash, this is not a 100% financed transaction)75% has to include the purchase price and the rahab amount requested.The terms can vary greatly.The two most important areas that will impact the terms the most is 1.

The custom builders in the area are very competitive and are offering pretty inexpensive builds vs comps.If the lot was purchased recently for 20K and the turn-key cost to build is $200K, after I close on the house (bank said appraised value would be 220K), would a new buyer have problems with it getting appraised over $220K even with other comps selling for 300K+?

What sales price range are you targeting on this purchase? 

is it possible to barrow (hard money) for the down payment im looking at turnkey and would like to purchase 2 at a time.

Also I only hope to purchase 1 new property a year so I assume those situations wont pop up too often.Thanks for the quick reply!

Meaning if you expect the new water heater to last 8 years and it cost $1,200 to purchase and install then it cost you $12.50 per month on average and that's the number you should use when calculating monthly cash flow.Being hit with a lot of capex early on when you own a rental can have an impact on your reserves for sure, but the nice thing is once they're done you should have X years before the same expense comes up again.

Hi Jin, That information should be in the master association documents you should have received when purchasing the property.  

That ensures you don't spend it on other things and know exactly how much you have to spend on the next purchase.

Hi Samuel, What is the price point for this purchase?