With out reading th contract I can't know if it is legal but it sounds like they created a situation where they have to be the manger.  

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If this was your current situation (paid off house in my location) and had less than stellar credit, what would you strategy be to scale quickly but sustainably? 

My question to you all is: have you ever had to deal with situations concerning family and friends not fulfilling their respect for you and your property as tenants?

The ideal situation is you guys updating and moving.

If you don’t have a certain amount of funds set aside for these situations as well as your portion of closing costs and some extra reserves for once you close then you’re likely not financially ready to be buying things.

It's either going to be a single family live-in flip or a duplex/triplex situation.

Though many investors bend the rules and possibly don't get caught, you have the financial situation to do it correctly.

Hey Rex, Interested in knowing how you dealt with this situation.

In this situation the tenants attended gatherings late into the night and would regularly return to their room extremely noisily at 4am.