Having said that, long-duration (6-12 month) put options, that are out of the money (the market would have to decline at least 5% for them to start generating positive $ returns) are not that expensive.

I am almost positive its his own money.

Even on the blanket loan I did for 3 of my houses.OTHERNot that big but they also wanted all the taxes, insurance, etc, in escrow accounts that they would maintain.

With FHA loans you might become ineligable by moving out and not continuing to maintain the property.

IMO, if a financial deal will make you declare bankruptcy, then you aren't in a financial position to be buying real estate.

Off hand, I'd think it's probably putting you or the finders in an illegal position acting without a license, but can't say as I don't know what the relationship is.

Foreclosure of second position lien?

I have managed to come out unscathed with two sets of renters and a positive cash flow due to great deals.

Without knowing the amount of equity, positive or negative, we can't advise.

As a newbie, how can you factor in these expenses to see whether you cash flow is positive?