The hidden costs are in the turnover, eviction, non-payment of rent, damage, numerous trips to the property, etc...   

That's what I'm told however, "affordable" has to be examined through the lens of variables too numerous to list in their entirety.

Quick question - did you do a numerical analysis of the property before purchasing to determine the cashflow you would receiving? 

Things lenders look at: Value of the asset used as collateralLocation of the asset (Strong markets justify higher risk) Experience of the builder/flipper Track record in the business Other Things that can be done to help mitigate risk:Solid project in a strong market, with an appraisal (comps work if the lender is knowledgeable on market)Experienced builder or flipperThorough cost breakdown so that all costs are known, and there are no surprises.Have a plan in place to manage funding to insure subs/suppliers are paid on time, etc.Inspection or progress reports on a regular basis (with internet it's easy to document the progress of jobs with video, pictures, etc.) 

However,  there will be numerous modified loans ending their trial periods and home owners may not be able to pay the new amounts that will be adjusted.  

I have read numerous articles stating that we can come up with how we think the partnership should go, but I'm not sure how to do that. 

@Barry Cooper though I do not have specifics for the Port Market I have driven through it on numerous  occasions.

When you change both the numerator and denominator just a bit it really changes the quotient giving you a much more favorable number.

We have purchased many hud properties including numerous ones where they "countered" and we did not accept the "minimum net to hud" sometimes a week to a month later they accepted the last offer we had submitted.

That investors business has been shut down since then because of numerous lawsuits.