My wife and I are about to close on our first property a 2 family in NYC and I'm already thinking as to how to get the next house. We have a family member that can loan us money at less than 3% the problem is that the...

If you are ready for sub-to, have private lenders ready, friends with self directed IRAs, friends who you can wholesale to and belong to a large REIA then you will be able to do something (and monetize) with just about every deal that you come in contact with.Its like the handyman who owns a hammer.

The biggest concern I would have would be the water damage from the tiles.

When I managed over 144 properties throughout the area, the biggest thorn was the sewer bill.

Originally posted by @Josh Engelhart:It sounds like you know or think there is a high likelihood this will not cash flow.The biggest problem I'm having is accurately running the numbers.

As a private Lender- 75% LTV is our 2-4 Family Max.

Only way this happens is if the note is private or held by a local credit union or local commercial bank ..if it rolled up in some large servicer one off buyers cannot or wont be able to do anything with it.

They'll offer interest only payments in 1 year, 2 year and 4 year options with rates going from 8.5% - 12%.  3 points is pretty standard for a deal that small UNLESS a broker wants to hack off a half a point or so to help out a first time investor who they believe in and want to work with long term.As far as all those lenders throwing money at you haha One of the biggest problems I see is loan officers wasting peoples time by acting so stoked on every deal they hear about and taking investors into the process without doing DUE DILLIGENCE. 

So my biggest caution would be-- if you only plan to hold it for a few years, you should think about calculating the interest on the mortgage that you'll be paying in that time.

The biggest scare to the keys is that if FEMA stops subsidizing homes which are older than 1974, the costs can become cost prohibitive.