Once the house is sold, the lien will be taken care of and the seller will walk away with a profit. 

There are two ways to do it.If you are looking to buy as a primary residence, you base the value on the comps with any adjustments for condition and amenities.If you are buying to flip, you use the flip formula: ARV - profit margin - rehab costs - closing costs - finance carrying costs = maximum possible offer.If a seller is holding out for price, a low offer without contingencies doesn't mean very much to them.

My understanding is that it is very common to have negative cash flow and to speculate on appreciation to profit.

Purchase:75,500Loan fees and closing :5000Uncles cut:10000Materials: 14000Holding 2000Real estate fees & closing: 10000Sold:138,900My profit: ~21,000 I have found my next potential flip 43k 3/1 with partial finished basement.

@Michael Nieves I would find a more profitable SFH or MFH and then when you leave rent it out.

Profit $30,000 on $150,000 Total project The report shows " Total Personal Cash Invested " However since I am borrowing the money , my cash invested is only approx 25% of Total Cash In , plus of course holding costs , etc..

Lending and flipping (if you profit) will give you additional ordinary and interest income to report.

Profits moving forward are split 50/50 in perpetuity.4.

I do not need to make a big profit but do not really want to go through the hassle to lose money.Thoughts?

@Surendra Chawla No I have not, but I have lived in Chandler many years ago ('00-'07) and have owned a SFH there (5 mins to Intel at Ray/Rural) which yielded a nice profit back in the day.