I am a currently discussing a deal with another investor and wanted to see if you guys see any potential pitfalls in the structure of this deal...

There are just so many pitfalls that you can only learn from doing.

My first few projects in Milwaukee and Baltimore were tough because I bought properties that other investors weren't interested in -- I couldn't figure out why the other investors weren't interested, until I learned more about the specific rehab issues in those areas.If you want to help someone in a particular area, my recommendation is to do a few flips in that area yourself first, so that you understand the nuances, costs and pitfalls associated with rehabbing in that particular area. 

@Rick McCandless like any investment there are pitfalls.

I think I've built a good safety net for myself, but there are a lot of potential pitfalls on this path.

Current tenant may be willing to owner finance since the payment to me would be only slightly more.How would I deal with the pitfalls of the mortgage company calling the loan, insurance, taxes, etc?

This is an excellent example by Heathen and also shows one of the pit falls doing these refi's.

I have an investor that when crazy on Newark and bought 5- 3 fam (little scary for me) but he bought buildings that were constructed 2006 so they'r nice n rent out fast even thought he got into 1 pitfall where there where no permits from the previous investors n had a hard time getting the C-0 however if you know the right people in Newark ull be fine.

It's the reverse of how many wholesalers work - but works very well indeed and avoids a lot of the pitfalls & mistakes !

How do modern building codes get applied in this type of situation and how could I avoid any pitfalls?