@Shiloh LundahlHopefully you won't think I lost my mind but I agree with you disagreeing with me on the things you mentioned and I agree with most of what you wrote.

That's on me, my other properties are in good shape, this one was always out of mind.

You can change your mind on what you would like to do as you get more experience. 1. 

There are a couple of things that come to mind, if a payment is missed the lender cares, if the servicer goes out of business or misses a substitution of trustee, the lender cares, if the borrower goes to the lender to try to get removed from the loan (usually to buy another house) the lender cares, if the property gets caught up in a bankruptcy or divorce, the court cares and that means the lender gets involved.

With all of that in mind, I think it would really be dependent on where you see that specific market going.

Just need to stat under the occupancy limit.Also keep in mind basement needs to be livable square footage, ie have egress and proper ceiling height. 

To give you something as a reference based on your budget (30-40% down with $1.8M), the general cap rates you will see in the Bay Area are roughly 3-5% https://www.loopnet.com/Listing/1047-Rich-Ave-Mountain-View-...https://www.loopnet.com/Listing/1180-Saranap-Ave-Walnut-Cree...You will find higher cap rates and more 20+ units buildings in SF, Oakland, and Richmond, but keep in mind of their stringent tenant laws. 

Marie, Please keep in mind that when you see people referencing with these funds it's because they are invested in these funds, bought the sales pitch hook, line and sinker and are being told by the operator, "don't worry about the market, we're experienced and conservative so you'll get all your money back and a tidy profit.

And considering I think a person who puts in plain black and white that integrity and character of the operator are key -- and then does something underhanded and incompetent is just mind-boggling to consider -- so I'm only left with a negative feeling about the documents these darned attorneys dream up! 

What's the details on the deal with firstwatch if you don't mind sharing.