I believe that it will effect the rental market harder in blue states than red states due to the sanctuary city policies .

On the other hand if they are a sponsor that is experienced in stopping a skin in the game, that's a huge red flag for me.c) how open to scrutiny are they?

This is all changing very soon with the construction of the Foulger Pratt's new "WestEnd Alexandria" Landmark mall redevelopment, a new 4 million square foot mixed-use redevelopment, including a new 1.1 million square foot Inova medical center already starting, with completion set for 2028.The development notably won the Red Clay Development of the Year award.On top of the +2,000 healthcare worker jobs the development will immediately bring to the area upon completion, the 120,000 square feet of office space will also bring a large number of jobs to the west end of Alexandria.

If they will not provide pictures of before and after that is a huge RED FLAG.

A common strategy used by investors, such as those operating through PadSplit, involves purchasing the property, completing basic rehab, refinancing, and then using cash for the interior build-out.Another potential red flag, even without converting common areas, is the addition of individual locks on bedroom doors.

People probably do this all the time, but skirting the law and subject to red tag if the city finds out. 

Quote from @Bruce Woodruff: Quote from @Peter Mckernan:Up front (First Contact) Red Flags - 1) Everything should be in writing and very detailed 2) There should be a very specific Scope Of Work3) They should not ask for much upfront $$, certainly no more than 10% - if even that.

One market shift and you're in the RED. 

I know, there are plenty of red flags there, but I do believe it is worth the risk when I consider how happy it makes my wife, how life-changing it will be for the family, how minor the financial impact will be on me, and how it gives me the opportunity to practice the steps of real estate investing with forgiving tenants.Finally, I am going to attempt to self manage as nothing comes close to cash-flowing if you include PM costs.

It gives you the flexibility to get started quickly and stay on track without the red tape.