Lots of these new construction builds were done very cheaply, and since it is wood framing with siding, flashing stucco, etc; if the proper flashing drippage and caulking wasn't done correctly you will often find leaks.

Some things I do to avoid bad situations: screen well, only have properties in good locations where people actually want to live (I find tenants behave better when they know they have a good thing going for them and that they are easily replaceable), set proper expectations, have a rock solid lease, go over it with new tenants to make sure everything is clear and agreed upon, and enforce the lease by issuing a formal notice to pay or quit every single time rent is late by even one day (and charge the late fee), or a formal notice to cure or quit every time there is a lease violation.

Give them proper notice, keep it friendly, and explain it’s all about fairness to match market rates.A little empathy goes a long way—help them understand the rising costs, and they might just thank you for it (okay, maybe not thank you, but they’ll get it!).

Relieve them of the management duty, as they are not representing you properly.

This includes getting comps or an appraisal to verify value, lenders title insurance,  a proper note and mortgage,  and you must be listed as a mortgagee on the borrowers property insurance policy.Our lending criteria in our lending business caps our loans at 65% of the after repair value and we control all rehab funds as we hold them in escrow. 

Hey Natalie, I was in SF proper and then Walnut Creek for years.

I always try to investigate what these guys are saying, because I know a lot of this is very difficult and well if it wasn't it would not yield such high rewards for doing it properly and successfully.

Your irresistible offer appears to not have turned out so well either by your own admission and my advice is to help you and others reading this about the importance of knowing how and what to have in your contracts, how to properly vet buyers BEFORE you bring them a deal, etc. your situation is a great learning lesson for others and for yourself if you are willing to learn from your own mistakes.As to the assignment being legal or not, I am not 100% knowledgeable on NC laws, however, I have had several experienced investors tell me North C has similar laws regarding this process as does CA, FL, etc.

YOU did not screen property  May be I did not screen properly.

The key to having great financial systems is the setup and systems: If you get everything structured properly up front, you avoid most of the ugly problems many RE investors face later on.I'm not an accountant nor a bookkeeper, but I have great recommendations for both!