I see the same open listing I would normally would list on list on Zillow from my colleagues.

I've read/heard it somewhere that you should just refer to it as an additional deposit so that you can use the funds for non-pet related matters if the issue comes up and the normal deposit funds have been depleted. 

Are these business partners where you are growing a portfolio together or are you just trying to get your foot in the door?

@Joey Samudio, I'd recommend buying the asset with a normal 1031 exchange and then layer on debt for rehab after purchase.

Overall, I'd say this is a fairly normal deal.

Cash flow works on an inverse with risk, somewhere in the middle is normally the best place to start.  

At the time, we weren’t sure if it would be worth it because the area was still finding its footing.

Tell him there is a termination fee, but you'll waive it if he shows a copy of the death certificate.That's what I would normally do, but it depends on how long he's been a tenant, how good he was, and other factors.

Not to mention its old but the soil is a big issue then just drive on the roads that is Yazoo clay popping up and creating the pot holes and I have seen roads heave 6 inchs to a foot after a big rain..

California requires an $800 for LLC's that are doing business in California.California law suggests that managing members of an LLC that are a resident of California are considered to be doing business in California.Normally people will suggest opening up the LLC in the state where you are doing business(Normally the state where the property is located at).Others will suggest opening the LLC in a different state such as Wyoming, Nevada or Delaware for charging order protection, business friendly case law, anonymity, etc