This scenario just reminds me why no one should represent themselves and should not prepare their own tax return.In fact, I wouldn't even represent myself before the IRS.

Prepare to have your teeth kicked-in, figuratively speaking - or not.

This isn't an uncommon situation (unfortunately), and the contract is how you prepare for and handle it.

In an audit, be prepared to show the income in your bank statements, to validate that you haven't under-reported it.

I got that initial boost of confidence most newbie investors strive for, the decisions I made were based on months of reading, asking questions, making spreadsheets and analyzing properties in that market.The best thing I could take away from this experience is that sometimes being ready to pull the trigger is a lot more than just over coming the initial fear of bidding; sometimes it's about being prepared to do whatever you need to just to have that opportunity.

I started doing this by saying things like this:"Tell me Prospect, if I come down to show you this property and it meets all of your general criteria, are you prepared to sign a contract, put down a deposit and make your first month's payment TODAY?"

Or say "we did this...and it was in this condition when we bought it"3.Do you prepare a list of the work that done along the business card of the contractors /vendors?

Because often times I hear about it taking a few days for the title company to prepare "docs".

Prepare yourself to invest.

I dont intend on walking up to these people and shouting "lend me money" , I do have the funds to service several high interest balloon type mortgages at one time, but I want to be prepared to answer whatever questions they may have before they decide to lend.