It has many holes as Brian eloquently outlined above. 

Digging a hole looking for gold is not investing.

They were blaming it on a snow storm in December and sicknesses in January.Issue 4: After tenant (from issue 3) vacated; they performed a walkthrough and told me things that the tenant broke (laundry door, punched a hole in the wall, the usual). 

I am not an attorney and I could blow multiple holes through that augment.

Just found out today the owner does this himself right now...So basically $50 in the hole each month other than $500 a month principal pay down.

Higher returns typically come with higher risks.  12% on a rental property will probably be in lower quality neighborhoods, like B- or C, and most savvy investors will sharpen their stick enough to start poking holes in how that 12% shakes out.  

After two hard freezes, there's so many pinprick holes in the pipes that it's best to replumb the whole house with PEX. 

One actually tore a quarter-sized hole out of the vinyl.

Under the list of "protected classes", the 10th line item is:"Source of Income The lawful source of a person’s income, including wages, a voucher having monetary value, social security, public assistance or other related payments."

I could get about $300 a month positive cash flow, and I own the property free and clear in 17 years.So I guess the real question is, besides rare circumstances like this - what would be a reasonable reward, payment, etc. to make it beneficial for me to dig someone out of a hole and make it worth their while to trust me for the next 15 years.