The buyer (the investor builder etc you find) pays the bank by way of his mortgage company (or his cash reserves) which are then deposited to the title company (escrow account).

However, I am reserved and shy of risky ventures, and I don't linger in comfort zones either.

I have a question about the 6 month reserve required whenever you finance a property.

Something that provides value to the transaction and meet people and work it from there.Even people with good credit have a hard time getting a loan on that number alone, you also have to show you have experience as a landlord or experience flipping or enough cash reserves to handle problems that will come up.

We have enough reserves to do the full upgrade if necessary, but I'm struggling to justify it - there is no immediate safety concern, and it's out of scope.Sure, the upgrade would have to be done at some point, and it would cost more to do it later, but we'll have more experience and cash, so it seems best to leave the electricals as they are for now.

What I was told this morning is that I can pay off taxes and purchase subject-to, then just have the money on reserve for the note, for the time when they come back out of the cave and contact us.

Say you've just purchased your first home-- you've drained a good chunk of your cash reserves and have yet to collect much in the way of rent.

Plus, I don't really have the reserves in place currently to cover that large of an expense. 

There are many other benefits, but differing taxes is generally reserved for the capital gains at point of sale through a 1031 exchange, not ongoing cash flow.   

It is sounding like the reserve for the auction is over $1 million, which doesn't jive with a 10 cap buy price, however, there appears to be massive upside on this project.