I have seen some instances though where if you belong to a credit union or the area is more suburban to rural the big lenders won't lend there.In those cases the local banks who understand the small market and will take the risk are the best choice.

Where they see risk I see opportunity.

I would think people less adverse to risk might gravitate towards a more linear market.

One risk is certainly triggering due on sale clause on the note.

More capital = more projects or larger projects2) It is one more barrier to shelter personal risk, Case in Point, i picked up a property at trustee sale and recorded the deed as usual, Did not do an eviction because property was obviously abandoned.

You'll want builder's risk insurance that covers vacant properties.There are lots of topics on this in the BP archives if you want more info...

Their risk is based upon the value of the property, not the purchase price.

But the question posed was how can we clean it up....I think.Well, follow the lead of the good ones, begin underwriting the deal, asses the real risks involved, employ tatics to reduce or eliminate identified risks, and assess the value truly given and charge fairly for the real risk assumed.

Not sure you had that info provided as it was an auction, but the one-year time frame might be the same so wouldn't risk going beyond a year.

Im assuming you felt very confident in your due diligence to take such a risk.