I don't want to be in the situation where I spend a substantial amount of money, get the land use permits and then ultimately have my tenants back out...Any input would be greatly appreciated! 

He will have strong rental cashflow and substantial equity gain from the forced appreciation as well as neighborhood growth and increased demand.

Also, we're underwriting our deals right now with 10 year Fannie/Freddie debt and only looking at deals with substantial upside/value-add which also further improves your LTV once your Capex plan is executed. 

Once you've achieved that added value, you can take that to a bank and do a cash out refi which will return a substantial portion of your investor's capital.It's the value add leveraged by the power of the cap rate that really makes you your money.

I've had numerous friends and colleagues offer me substantial amounts of money to invest (in one case $1M) and have finally decided to take a serious look at combining some of my funds with my friends and colleagues to purchase an apartment complex. 

Additionally, if you don't have a team in place already, she has a substantial list of contractors, PMs, lawyers, and other contacts you will need. 

I would say if you found a property that had the size and similar amenities of where you currently live you(or at least not a substantial decrease), there would be little issue.

In which case, your extra money might be better deployed into getting more deals.Actually, that would be my suggestion - pay the highest interest rate (for the ones above 5%) till you bring it to the point the principal/interest ratio is substantial (like 80%/20%) and then stop - the note itself will act as asset protection.

Training is important to me too and looks like the training is way more substantial at RM. 

They're not in the business in taking a lot of risk and a 5 unit deal with someone who's never done this before is risky.