Figuring for future value your going to lose about $200k of that future value.  

I see a lot of investors buy good investments, but then they lose tens of thousands because they have no idea how to manage.

@Hedman Maximus too many investors worry about DIY pennies, while losing dollars - which it seems you may be doing.Why can't you hire a PMC to handle the properties for you?

Feel free to DM me if you'd like more insights on all this (we don't do biz in Alabama so got nothing to lose).Here's some other "copy & paste" advice on how to search for a better PMC:----------------------------------------------------------------------------------------------Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

And lets say you then rehab it only to find out there is bad title and you make a title claim.. if there is no loan on it your only going to get 50k from title insurance and you will lose the 50k you paid for the assignment and any money you put into rehab. 

Business owners won't want to get tied up in litigation and if there is a good chance they will lose, it is easier to simply follow the contract.How would that work with a lower-end tenant? 

Learning that the slower I move, the more money I lose.

So you didn't do anything wrong, you just didn't know.As for alternatives, most counties have an appeals process... but you will likely lose if you go that way.  

Let's assume that the neighborhood is a C class and the median income of the city is greater than 3X of the market rent.Here are some of the considerations I've come up with so far:- Units are in need of renovation and capex is too high or not available- Unit quality is not the same as market - Seller is worried about losing tenants due to increase- Vacancy rates are high or filling units have been difficult- Rent increase would take multiple increases over multiple lease periods to get to market rate if seller is trying to retain the same tenant- Seller inherited property and just want to liquidate- Seller needs to liquidate quickly (financial burden, sickness, quick exit from land-lording)It seems like I might be missing a warning sign about a deal if they are selling with current rents that are under market; but again, this seems to be most of the properties I've underwritten.And in the same vein, what should I be worried about when purchasing a deal with under market rent with the intention of raising them after purchase. 

The last thing you want to do is go through formal sale since you’ll lose the Prop 13 tax basis, which is likely a $20k/yr saving.