@Mike Faulkenberry It depends on what stage you're at in your life and how soon you need the cash flow.

The homeowner gets the excess money so he was very smart and some fool paid $60k more for the house than it would sell for on the market.

I would also be careful buying San Diego at this stage of the market.

FYI: I have 3 properties in mind that are all in 3 different stages of "sale": Pre-Foreclosure, Foreclosure and Auction. 

The excess capital generated by the real estate business is used to passively invest in real estate opportunities.Sure, this model is a lot of work... but to exactly John C's point above, i'm not in a rush to leave behind a career that I enjoy, find fulfilling and pays for more than 100% of our lifestyle ... only to 'retire' before the active real estate business has started generating at least as much as the primary day job does.

If they never get money out of him, that's going to set the stage for the city to have no power to enforce their own rules.I agree, they are not on the land owners side and they are a pain to work with.

They will give you draws as you complete different stages of the project. 

Once you're past the "hoping" stage and have a contract is the time to stipulate how you will acquire the property. 

Most of the individuals posting here are well past their primary purchase and are working in the 25% down investment property stage.

My fear is once it gets to the "open house" stage, that's not the deal I'm looking for.