@Rick Maningas I just found out I am not splitting net profits 50/50 at all; it was just the construction cost of $40K ($35K with $5K for cushion for unknown) and the 1% realtor fee for himself for when John sells the property.

Go down to the city planners dept and see what the city had permitted it to be.The additional unit may be unknown to them and therefore illegal until you can ask the city to grandfather it in as is or make the necessary safety changes to make it legal and insurable.

I don't like to transact on things that have too much unknown.

Lots of unknowns.

Is there anything that you would recommend to a first time investor moving to an unknown area(other than read, read, read, cause I am gobbling up as much as can) @Russell Brazil I will do some research into this and determine what the Denver market looks like from a leverage standpoint.

Unfortunate the lien came up on title but it's been my experience that most of the best sellers I come across that are willing to give up a good deal are somehow not able to because of unknown liens and judgements. 

I have liquidity from the previous business to invest and hopefully kick start this endeavor.Biggest challenge - I don't know this industry, I am coming from a completely opposite industry in the technology field.What I have, I think, in my favor, are colleagues from the RE industry with experience in both traditional RE sales (agent/buy/sell) but also experience in the REI side (one owning about 70+ properties and the other owning about 25 properties, both using their properties for passive cashflow)With an engineering/analytical background, my greatest fear right now is the unknown and I am trying to shore up that experience through reading and listening to others, but as I have already discovered, its like taking a drink from the fire hose - way more knowledge than I can consume in a short period of time.Questions I would pose to anyone interesting in providing some feedback -- Best way to look for that first opportunity?  

Can you easily get up in the attic to make sure there isn't hidden mold growth or unknown issues?

It's much more typical.Too many unknowns related to site, type of construction, location, etc. to comment on construction cost

A title company where I have never business may get worried or bring up issues which may concern your refinance lender.It is best to let sleeping dogs lie so don’t tell an unknown title company the friendly loan proceeds initially came from you.It’s none of their business your terms with your lender and how you acquired the funds.My loans from a friend are not truly free, though he would do so for free.