Then it takes another seven years to make up the losses.

Does working with sellers in pre-foreclosure mean you have to be a loss mitigation expert?

In the lease, can you reserve the right to sue the tenant for any loss it seems that they have caused, like fire or other damage, something that goes past the amount of the security deposit?

You could make as much money managing property for others without investing the money to buy your property.Costs like turnover costs and reserves for capital improvements may not happen this year or even next but if you are not planning for them they can sink you.

Let's say $2,000 for the rent.Gross rents: $2,000Operating Expenses: $1,000NOI: $1,000Mortgage Payment ($155K, 30 yr, 7%): $1,031Monthly Cash Flow: $31 LOSS This is NOT a good deal.Mike

We could:1) Cash out our $3,000 index fund and $1,000 in individual stocks, taking a loss (this loss won't help us with taxes, our income is so low we get everything back anyways), and scrounge up loose change for the rest.2) Ask our bank to lower the interest rate on our debit card credit line (currently 9.75%), extend our credit from $1,000 to $5,000 and live off credit this summer until we can take out more student loans in the fall.

At the risk of overkill, I might point out one more factor that does point toward losses of equity values in the long term in the area of Alt-A and even prime becoming far more staggering – appraisals for sub-prime loans were highly scrutinized, even during the refi boom.

We are bidding 10K below sales price (it has been on the market for many months).Our agent had several suggestions to get the repair $, including:get 20k commission to realtor and he 1099's it to uspd to mtg broker as discount pt and broker gets it to usfind a lender who will loan based on post-repair valuedo fix&flip loan, refi when repairs are finishedThis will be our first rental purchase, so we are at a loss as to which is the best option.

So if your strategy is to refi, you calculate how much you can take out without a negative effect.Your strategy will be to build capital either thru rental income which can take years or to get cash from a refi.

My advice: cut your losses and run unless you can straighten up the problem and go on.