You can go up to a 4 unit and get favorable gov't financing for owner occupied buildings with low down payments and low interest rates. 

Hello, A buddy of mine needs to get 3 of his rental properties refi/cashout in the Bay Area. He's looking for a lender who will get him 3% to 3.65% no cost only title fees..... 2 of the assets are a 4plex and one is a...

What is the best way to put pressure on the lien holder to settle low?

I would pass just on that basis but make sure your expenses are realistic before you do that: taxes look high, vacancy looks high, insurance looks a little low, and property management looks high.  

@Daniel Ramirez Spending quality time in finding the right GC is probably the most important step in managing a Flip without doing the work yourself, so I commend you for taking the time to ask for opinions on how to vet one properly.Having just found a GC that I like and who is honest, I'll describe the process of how I selected him.First, I did research to determine whether or not his business is successful.

You guys can keep skipping these low equity houses if you'd like.

@Jay Orlauski,Cheers, no problem.One big take-away for me was also that the owners of the real estate stood to make a crap ton more than the sub-letters, overall.And also that wholesaling isn't really the best low-barrier-to-entry way to get into REI any more.

Here is the deal, we sent out direct mail and got a ton of leads, this is one.House: Duplex 3 bedrooms 1 bathroom downstairs/1 bedroom 1 bathroom upstairs, 2 stall detached garage, owner states not a lot of repairs needed (maybe $2,000 total)Current Rent: $1,225 totalHouse assessed at $96,000Current owner owes $52,000Wholesale offer (from our formula that would make sense for us to buy it wholesale): $53,000 cash - owner declined (too low)If we keep it to rent out do we get a hard or private money loan to purchase for a higher cash offer (we think he would take $70,000) and then take it to the bank after a certain amount of time to get a conventional loan because we will have almost 30% equity in it when we buy it?

Of course tenants can lose their job and unexpected life events happen even we we did our job right.Property management fees vary from low flat fee to 10%.  

Low taxes great place for newbies to start.