Huge counterparty risk, I am just working through a scenario where a correspondent HML in the midwest got defrauded from bad diligence and their funding partner is having to clean things up.

Take a look at Personal Property versus Real property coverage, plus clean up costs to make sure your covered.I would also look at covering your project from the Subcontractors. 

they said around 90% of market value.I tried to get them to understand that this property needs a LOT of work, almost a full gut, some holes in walls (small) old carpet needs to be ripped up, i mean like the works on this thing, you can prob get away with touching up the kitchen since its real hardwood and the bathrooms as well but this prop needs at least 80k.Found out owner actually owes 140k on property, and zillow is zestimating it to be 127k.

STRs also avoid automatic classification as passive if rented for seven days or fewer per tenant.To maximize tax benefits, maintain detailed logs of all hours worked on activities like tenant communication, cleaning, maintenance, and marketing.

First of all, my personal credit was a very good at 735 midscore. 100% financed tidied it up just a little bit more with  just cleaning up a couple of things on my credit.

I would point out that you have a higher end home here.. its not a 70k rental in the mid west were you just squirt some paint on the walls and put die on the carpet etc..

It is entirely possible to self-manage with a strong cleaning team.

When we create our business plan, we also include our exit plan.We'll only proceed if we can clean this up, acquire new tenants at higher rents so we can increase our NOI, which in turn should reflect our cap rate and profits.Since this asset class is new to us we will tread cautiously.Scheduled to preview tomorrow. 

They must first move out, leave the property broom-cleaned, and then they can pick up the funds at our attorney's office.Most won't agree to all this - so they are liars.

Failure to clean up pet droppings willresult in a service call (Pooper Scooper) billed to the tenant.