Regarding asset prices, I realize the SF Bay Area is a unique animal (geographically constrained land, bound by oceans and mountains, and it has Silicon Valley as well as difficult development requirements - it's a unique ecosystem, that's for sure) but it doesn't seem to me that rent control has negatively affected prices that much.

It's all odds based.You run a good chance that the tenant won't challenge it as they did do damage, however if they do challenge it & take you to court you'll probably loose & most jurisdictions allow the tenant to sue you for double damages.

The sponsor is critical, but even the best sponsors get over confident, get too big and can loose sight or take their eye off the ball. 

Maybe you can take advantage of the training during your 2 years....and learn the models and systems to be a powerhouse when you cut loose and sell full time.The biggest brokerages are going to have evening classes and training as well.

She also said that her two years old child is constantly inhaling smoke coming from the second floor, and she is afraid the Pitt bull may harm her child as it is sometimes let loose in the stairs and the back yard.

It sucks to just loose the cost of an inspection but long term it’s a great investment.

Mean time, she is practically squatting without paying rent and we must resolve this mini crisis because we are loosing rental income for couple months now and hefty eviction/court fees as the days drag on. 

It is bound happen - but just have those risk management controls in place to prevent a big loss.

If they dont tell you, insinuate you will file an ethics complaint, that will likely shake it loose.

There is bound to be a few in and around Indy that service this market.I'm not sure why the seller cares about your LTV, but you will most likely need at least 25% down.If you share the rest of your numbers, the community will be happy to double-check your math and offer thoughts.