My position as GP is justified with work experience being that I invest and develop for years, and for putting the deal together and bringing the unique opportunity. 

HOWEVER, I recommend reading Stuart's advice above very carefully and perhaps soliciting his feedback on the deal in more detail before putting too much more time into it. 

If they don't have a positive test, they won't have anything to back up the photos if it tests negative now.

Hi There-Some feedback would be great- Do you Sell the house yourself or do you engage another Realtor to do the sale and keep it at arms length in order to reduce any liability?

Many investors who are in a similar position in my market (another HCOL/tenant friendly area) choose 1 of 3 options.1.

It's about finding a situation where you can force enough value to create a 20%+ equity position. 

If the numbers still work, you’ll be in a solid position to proceed.

I have also purchased using Real Wealth Network, and they do a much better job of vetting the local markets and providers and will stop recommending any providers or vendors if investors are giving poor feedback. 

However, in such a case, a rescue fund would hold a superior position in the capital structure compared to the common equity investors, including yourselves and there acting as a parasite taking equity upside from all common equity investors.While this might provide a safer position for the pref equity slash rescue fund, it would also significantly impact the returns for common equity investors (previous guys).

This creates a negative initial position.