When there's tenants already occupying the property, there's often times different leases that were signed among the tenants.Additionally, renting by room usually sees higher tenant turnover which in turn causes more work for the PM.Other challenges to consider:- Disputes/conflicts among tenants (different personalities if a tenant doesn't know the others prior)- Occupancy limits- Splitting utilities (what if someone uses more water?)

Water heater 12 years to replacement (may need some service before replacement).Recognize many cap ex items are years away.  

Purchase price: $242,500 Cash invested: $49,000 This is an older house, built well on concrete block, that is next door to multi-million dollar houses on the water.

When you are investor friendly it means you understand the metrics of the buyers property search.I have seen so many agents get comfortable and simply add their new buyers to the "Hot Sheet" and they blast the buyers with properties that do not even fit the buyers cash flow needs or budget.

The main issue with rental basement is water if it has water issue usually it is a simple fix .Clean gutters ,discharge gutter  water away 10" away from foundation, make sure you foundation soil is slopped away from it .If you need to buy soil get a clay mix .Cut back any tree too close to the foundation look at the drip line that's how far the limbs are out from the tree .If all that is done still has water buy a sump pump  carry the water to day light away from foundation 10" to 15" .

Water services.

It's probably a vent pipe for a furnace, water heater, or something similar.

(Current cost to bring in water line is around $140k or a well starts around 40k with no guarantee of hitting water) What made you interested in investing in this type of deal?

It will help you manage request for repairs/maintenance requests, notify when you are getting a lease coming due, and perform superior accounting verse other more watered down apps.  

This deal that you mentioned sounds at first blush that it's dead in the water because of the large deposit.