Many people do not relize the risk involved and buy properties because the numbers say cashflow.

That being said, I understand the risks involved and have the money to buy the property outright with cash and do the repairs.

Its the cash flow and risk of nonpayment ratio. i.e. $400 a month on a house with PITI of 800 is better than $400 a month on a house with PITI of 1000 because if either go vacant for a couple of months, I'll get back to profits quicker on the first than the second.

I ran into the same issue with Navy Fed when I was looking for financing for our first property and that's 100% a choice by the lending institution, presumably to mitigate risk.

Obviously some of my statements were very broad, as I did not want to risk crossing the line on political posts on BP.

After all the original FHFA RFI was geared to "all" solutions, it is simply curious that so many came back with the same ideas that were already "floated".Anyhow, the 8% is of course relative also, is it an unleveraged return using leverage monies, is it guaranteed risk free, is it including capital appreciation, etc.

Your total nut must be around at least 1000/month given the size of your mortgage and you're only renting for 1250 - that's a pretty thin margin (maybe breaking even after expenses), especially if you are going to be out of country soon and have less control.I would consider selling the condo just to avert the risk it is presenting.OTOH, if you couldn't sell it within the year, you might consider paying it down a certain amount - not completely, and refinancing with monthly payment that is more favorable to your cash flow and overall risk.

If long term wealth is your goal then getting a property with 10% cash return may be fine when you add in equity gain and appreciation, that's a personal call.How much risk can you deal with, how much work do you want to put into it (in terms of rehab and management), and what type of returns do you want to get will be the key things that should guide where and how you invest your money.

Would they really risk forclosing on a property that is in good standing?

MOST people are not aware of long term risk.