The plan funds the transaction, the property is properly titled and John earns a standard commission which he puts in his "personal" RE business.

You should be buying every property using the standard formula which is 65-70% of the ARV (after repaired value), less repairs, less your wholesale fee.

I'd like it to be reasonably close (I'll be living in Marin county).Considering my limited capital, I'll need to start in lower end areas, at least by Bay Area standards, but I'd rather not have to bring an armed escort.Some options I'm considering are:OaklandVallejoSanta RosaNapa/SonomaVallejo in particular looks interesting.

Obviously it depends on the type of project you would be developing, location, quality, etc.

The reality is there are MUCH BETTER properties out there than buying this POC at any price.If we are having to come up with extreme examples under which this property might possibly work it is a loser.If you change the layout etc. it still is on a crappy sloped lot.Any property manager will tell you these types of properties even after being rehabbed nicely are hard to rent out to quality tenants.On value add deals the investors I talk with that own 100 to 150 units at a time go for buildings that are at about 50% to 60% occupied.The sweet spot (as they call it)where all the copper and electrical is still there and some tenants are paying for cash flow.The buyer can convince the bank that the property is going down hill to take a lower price and the seller if not the bank has already given up on turning the property around.Over time the new buyer can rehab each unit one at a time to turn around while having cash flow.

The Consumer Financial Protection Bureau, created by Dodd Frank, is set to release a new set of mortgage lending standards by January.

I just wondered if there was any sort of standard contract in Michigan I should be working from.

Richard look up your local real estate investor association.If you go to work for a flipper to learn the business make sure you are not used and abused.Make sure they have completed a certain volume of deals and that they have the knowledge to give you.What investors do not want is to work with someone with no drive who wastes their time.If they will pay you a decent wage that is at least what you are making now or more,you hit it off from the start,etc. then you are on your way.Eventually you can partner with them on some deals when you save up some more cash and they will show you how to save and supplies and do quality repairs and upgrades in a fast manner.

They have some good quality contractors.

California, for example, is horrible compared to Texas, where the standard to hold a property owner liable for a contractor's negligence is exceptionally difficult.