i agree that a new purchase at 75% equity will typically not have significant cash flow and may even be negative when properly allocating for all expenses.Investing to max equity without reserves is risky and you indicate would result in stress.  

While those inquiries might not result in tenants, they can still show the property is appealing and could be an indicator of future traction.The listing itself looks great.

The spread between what they're paying and what the market rate indicates is not that much.

Because the volume of deals done in the group indicates they might be overpaying?

In addition, modest increases that take cost of living and other indicators into consideration is a reasonable way to assure longevity among tenants.  

If 85% of the units you are looking renting for around the same rate, surely that is a good indication of market rent.

It's important to find out.But for now, let's assume that the property is worth $63 million as @Jason Piccolo indicated above and the loan balance is $59.8 million. 

." - which to me indicates the same doubts that I have about the legality of the IRS position.Until the IRS is challenged in court over this position and loses, I choose to comply with their position.

Izraul, you never indicated where the cash for the "loan" may have originated. 

And I have below clause in the leaseRental Application: Only those people indicated on Tenant’s rental application are permitted to reside at the Premises, with the exception of any minor children born to, or adopted by, Tenant.