HELOCs are usually more conservative than traditional 1st position mortgages.

Where are some markets with high positive cashflow?  

Positives?

I have verified they do a good job and had positive reviews about them even here on BP.

I'm assuming that does not affect the other FHA positively. 

This does a few things: how much of a loan I can seek how much cash I really need up frontIt would more accurately reflect any appreciation (though I'm planning on being a buy and hold investor, and equity is less critical than positive cashflow, IMHO)Example:Turnkey(TK): Asking price: $35000,  with tenant $650/mo.TK: $300 setup costZestimate:  $18500Closing Cost: $1000In BP's Rental Property Calc I then would put that the rehab cost would be $16800  (16500 premium + $300 setup)the value after $18500So,  what have I missed? 

With rent at $800, expenses at 50% ($400), deduct the cash flow you are buying with your 40K ($330) and your positive cash flow produced by the property itself is only  $70/month.

He got offendet by my approach to make an offer and told me, i am not in the position to bargain. 

Whatever the case, I agree that safety wise it's not a good idea to enter an occupied house plus I wouldn't want to put us in a position where anyone could accuse us of theft. 

@Douglas Ellis this is truly difficult to answer without knowing your whole position, experience, goals, etc. you can make an argument for each method. 20% down minimum exposure, rent as-is, won’t cash flow as high, but if you can manage and maintain, the product will hopefully run itself with the occasional maintenance call and such.