I'm in San Diego as well and cash flow isn't the be all the all for me but I'm finding it difficult to not be in the red monthly - may I ask what areas of SD you're investing in?

I think that is also largely because that same home was 320 at one point vs 420 now.If you look at the affordable suburbs (not Green Hills), you will notice that they are beyond smoking red hot at the moment because it’s pretty much the only area you can get anything decent for under 300.

That's a potential red flag but assuming he has a valid reason then not a big deal.What is meant by minimum 10% guaranteed return?

The low price of the land and the fact that it is right next to commercial development would be red flags for me.  

@Heidi Dunn, this is a huge red flag to me.

They apparently manage almost 300 properties, which was kind of a red flag to me because there were only 4 employees.

I think you are trying to solution a side effect versus the root cause.

If you're putting up 100% of the capital and they have no skin in the game that's a red flag to me.

For various reasons, I'd really like to get a tenant in there who has personal roots/ties in the town I'm in.

You're starting off in the red, your only option to be the least in the red is to raise rents as much as possible as fast as possible.Using your numbers and some other assumptions such as starting at 900/mo rent I get a 7.24% IRR.