The regulators expect the REOs to be cleared out and impose pretty hard capital requirements to motivate the banks to sell.

It sounds a little like the developer wants to park lots with investors so they can free up capital for the balance of the project.At one level the deal is interesting and might be worth the effort.On a different level you need to check out how the cash back works. 1.

As a way to make quick profits/capital.

My husband and I are working on some capital to get back into REI (he already has experience) and we were talking about getting Market Value's & COMPS from Realtor's.

Just focus on what you make after you find the price at which a place sells.Having the liquid capital is better than having paper profits if you want to buy again. 4.

For example, you completely ommitted advertising, management (even if you do it), maintenance (even if you do it), legal expenses, evictions, setout fees, damage done by tenants (in excess of the security deposit), entity maintenance, utilities paid by the owner during rehabs and vacancies, capital expenses (although not technically an operating expense), lawsuits, etc, etc, etc (I could go on and on and on).The good thing is that you're at break even, so this is not a disaster.

If you are making a loan to the lady you are tying up your capital.

I understand that if I build a house and use it for my primary residence (even for a short while) then I am exempt from paying capital gains tax when I sell the house.Now, what if I sold the other two lots?

I am young, and I have fairly no capital right now but I do have dreams, and I do have drive.

Operating expenses include taxes, insurance, management (even if you do it), maintenance, advertising, utilities (at least during vacancies), capital expenses (although not technically an operating expense), entity maintenance, legal fees, evictions, court costs, evictions, damage done by tenants in excess of the security deposit, I could go on and on.At any rate, you left out all of these expenses, which means your negative cash flow (even with your interest only loan) would be a monthly LOSS of about $768 per month (over time).Good Luck,Mike