Call came in today from a DM campaign and wondering if I can make this a deal somehow:SFH ARV $140kRepairs ~$12kSeller Owes $116k (1st and HELOC)Tenanted at $1000/month - which is negative cash flow with existing loans and taxes.Sellers do not have money to use at closing to bring down the purchase price.

If that number is positive its added to your income figure if its negative you have to qualify for it as a monthly obligation similar to a car or min credit card payment via the typical 43-50% debt to income ratio depending on where your reserves/assets/credit are.If you've held the property long enough and filed rental income the schedule E of your tax return (or corporate return) will be used to determine the net income.The formula for net qualifying income once the tax return is filed is made to seem complicated however in essence it is the monthly average net operating income(NOI) based on tax return minus monthly debt service payment.

My name is Lenny and I currently live in Long Island but spend the majority of my time in NYC due to work.For years I have always been interested in becoming a Real Estate Investor, but have either let negative people talk me out of it, or let small things or my lack of knowledge hold me back from moving ahead.I came across this site by randomly typing in 'Real Estate forums' into Google, in hopes that in this day and age there is a forum for everything, and sure enough I was right.After browsing the site for a few minutes, I thought for sure it would prevent me from accessing any extra material due to my past experiences in regards to Real Estate knowledge.

Again, I still have yet to speak directly with the tenant.

Given you low purchase price, though, you're probably not going to be cash flow negative.

Is it ever a bad idea to bypass both realtors and speak with the buyer directly?

It's a short sale, unless you want to take it sub2, fix it up, and eat the negative cash flow for 15 years or so til it gets to zero equity.

I say rent it out first because I wouldn't borrow money against a negative cash flowing property.

I advised him to speak to his accountant after I asked him if it was his primary residence and he said it was not.

Better yet, take the gig and ask for upfront speaking fees. 10k per engagement, local only, once a month not to exceed an hour.