Should that not happen, then the trend that people have noticed - a decline in REO inventory - will likely continue.One other thing that could affect REO inventory that hasn't been mentioned much is the willingness of the lender to discount the amount being asked at the foreclosure auction (sheriff or trustee sale) below the debt owed.

You haven't factored in future vacancy, rent loss, capital expenses, etc. into your equation, which would likely take your expense ratio to somewhere closer to 45-55%, or earning about $1000-1200/month before debt service.Speaking of debt service, you mentioned a $75K loan, but nowhere in your post have you mentioned your debt service payments -- they will detract from your cash flow and cash-on-cash return.Not saying this is a bad deal -- I just don't think you've analyzed it correctly to determine how good (or bad) of a deal it is).

I've found the low prices and allure of large profits and improving the area from such low priced property is an illusion and the savy investor should consider areas with better economics before placing high risk bets in these areas.Here are some bullets on lessons learned:- If you have debt service and tax payments, you may not have time to wait and find those housebroken tenants as your expenses clip away.

That appears to be paying cash, so there is no debt service involved here.

Yes, probably uncooperative junior lien holders, or the bank saw that the seller had additional assets or a good job such that they could effectively go after them on a deficiency judgment, versus the SS where the seller was probably negotiating hard to be fully released from the debt.

That's about as much leverage as I want anyway.As far as HELOC's go, I'm assuming that most people want to lock up long term fixed rate loans, not have a ton of floating rate debt at whatever point the worlds' lenders ascertain that the future US govt cash flows available to somehow repay the spiraling debt and unfunded liabilities (a mere $100T or $1M per household), are woefully and absurdly inadequate.

Assuming 50% for expenses you'd have about $5,000 for debt servicing and cash flow.

There are tons of additional threads and setting up new entities if your equity exceeds $250k in one, raising capital, utilizing blanket and other insurance to protect you from claims, keeping debt on product to discourage suits, using trusts to hide assets, etc.

What is the bank wanting to see as far as debt to income and other criteria.

Since I bought the house from my home equity line, I’ll be without a house and with a mortgage debt.