He is probably referring to the the costs incurred while doing the renovations. 

@Kay March , Prepaids refer to escrow for various expenses which typically include taxes and insurance. 

Are your referring to an insurance policy?

As you do more and more deals, they will refer other folks over.

I called the phone numbers they tenants gave and both references are SFH landlords.

It sounds like an unreasonable seller, and it seems you have given him some viable solutions but he just isnt interested. 

@Michael Noto thank you very much. i used one of your references for original hard money loan, so thank you again. 

I have ~ $10k to put down on something to still have some $ in reserve just in case (currently employed for ~ $33k/yr).I'm driving around looking at various cheap properties in the area as I find them on Zillow and seeing large contrasts in the area -- what many of you would refer to as C- to D areas and some B to C as well.

It's always interesting how Realtors go from not rate sensitive at all when it's time to refer a client, to hyper rate sensitive when it's their own personal house. :)You said you felt that your regular lender was "robbing" you.

I think they refer to it as such since I didn't use any trick such as BRRRR or private lending to get started.