@David Jayne - In this situation, discounting the rent is a BAD idea, especially if the property already operates at a loss.

I under estimated the negative aspect and had to drop the price so low, the net result was a small $2500 loss.

Your plan sounds feasible and you'll find it changes over time anyway as you get more experience.

If you buy it, buy with full recourse with an indemnification clause from any loss arising from his note. :)

I've been trying to find out who takes the loss on a foreclosure.

My numbers show that at 140k and only one half rented I'm at a small loss, but I'm also living in half.

Quicker closes, No qualifying, etc. and when you have those deals that work out badly or you take a loss (it will happen), the JV can look pretty good.JV will never look like the best deal in the pro forma numbers but how often do you hit the ideal numbers?

You can then contribute up to 20% of profit theoretically generating a loss.

If it's your home, and it's vacant, then theft is indeed an excluded cause of loss, specifically because theft is more likely in a vacant home.

Seeing the pending potential nightmare tenant situation looming, I decide to cut my losses and let her off the hook.