You would want to holistically look at your personal balance sheet for sources of liquidity and credit (cash, brokerage account, credit card, HELOC, 401k borrowing capacity, Roth IRA contributions, etc.).  

There are several reasons for this.An IRA may borrow, but the loan needs to be non-recourse.  

.- if the loan is atleast 2 years old (paid on time of course) and not more than 5 years old the borrower can request a BPO if the borrower believes the value has increased enough based on market value alone to remove MI but the requirement for this market value only increase is 75% LTV or lower based on the current BPO (so in essence you need 25% equity on current FMV - fair market value).- for the above 3 scenarios payments must be current with no 30 day lates in the past 12 months or 60 day lates in the past 24 months (on the current mortgage or "other," credit too)What is interesting is the above only applies to 1 unit properties because 2-4 unit properties its the same as the above except the requirement is 35% equity or 65% LTV (same).

There is always someone who will go for any deal, but I would say that is generally not a good deal for the lender.Lenders generally want a guaranteed return, a schedule for repayment, and collateral.Equity partners are generally willing to forego the guaranteed and scheduled return in exchange for a piece of the upside.Also, if you are borrowing the rest of the money from a traditional lender, they probably won't go for this either.

So a very important question how strong is your borrowing power.?

It may be months or even years between the time that the borrower stops making payments and the lender initiates the foreclosure process.

That way I only borrow the money for the day of the auction unless I'm successful.If I'm successful I keep the loan out for a few months while I rehab and then either sell or rent/refinance and then I pay back the Line of Credit.

Many do not adequately vet their borrowers.

HOWEVER if you had plenty of money to cover these risks then you likely wouldn't be needed to borrow forward so much of their capital to buy the next unit.

And the bank is still only borrowing at 80% LTV; there's a higher chance now that i get that refi because the amount i'm requesting would probably be closer to that 80% then the appraised value of the house right?.