Of course everything has to be disclosed, the market value and the underlying loan.Also, the buyer has to be fully aware of the balloon and that he will probably has to come up with money out of pocket if he hits the balloon and the house still wont appraise.The seller, in the other hand, has to be aware that the chances of the buyer leaving at that time instead of buying are high.

Greg it will depend on the portfolio of the bank and how many performing versus non - performing assets on the books.The bank might not want to refi that type of product with too much of that type of asset class non-performing on the books already.They might have too much defaulted commercial all together.For value add plays typically occupancy is an issue.The lenders will want certain occupancy levels obtained for at least 3 months depending on loan type and typically stabilized for 6 months to a year or longer.If you buy an apartment building at say 50% occupancy using a hard money lender or private money and the going vacancy rate is an average of 10% then the lender wants 90% occupancy averaged out over time.When you refi you will only be able to go up to a certain percentage to cash out or can just convert with no cash out to the lower interest rate.Regular banks do not lend usually on sub par occupancy levels for the area.They see it as too risky and the say 60% occupancy can quickly go to 30 or 40% and they have a foreclosure or short sale on their hands taking a loss,plus inspection reports,attorney fees,appraisal and environmental review etc.

IMO, none of these investment activities are good as totally hands off operations.If you don't vet every loan, you will end up with some very bad ones.

On its best day in today's market.Mls remarks say (among other things): *1) "Approval in hand!!"

I mostly wholesale from MLS, my guys dont mind since I'm handing them something with no frenzied competition that the MLS generates.

If you are selling a car and 2 different people come to look at it at the same time.... 1 has cash in hand, the other says they have to wait until they get paid in 2 weeks - which one would you sell to?

I actually wish I'd borrowed more when buying these as I'd have more cash on hand and feel less worried about doing more deals right now.

My quad's come out to 64,000 a door for 850 to 950 a month in rent on my apartments.I don't look at it only from a cash flow perspective however.The area I have the buildings in is an A location prime for redevelopment down the road.Mike it sounds like your local market is competitive with investors and your margins are thin.On one hand it is good to be in a thriving market where demand is strong because usually supply is lower and the amount of rentals and new development for multifamily cannot meet demand.This helps rents grow at a rate that outpaces utility increases and inflation.The downside is it can make some investors overspend on a property because they feel good about the market.I looked for over 2 years before I bought something.I said many times those buyers were nuts.I tracked the properties and many investment properties after purchase just 1 to 2 years later went into foreclosure.They bought at such a price that it wasn't sustainable.I look for a 10 CAP or better on my purchases.The problem is if you someone who has only gotten 1 percent interest off of a CD or Treasuries or they have gotten beat up in the stock market.Those types of buyers jump up and down to get a 7% annual CAP return beating out your offers everyday of the week.By in large many buyers like this can be lazy.They only look in the MLS for listed properties.Value can be found marketing to sellers that are not on the market.They don't want to make public all of their problems ( I know it is common knowledge of default at some point but this is their mindset ).

I don't really have any of the docs, forms, contracts at hand just yet, but that's because I haven't looked.

Our hands were tied by the systems and the people and everyone at the bank who touches the deal.