I'm <5 years from retiring, so in this time period, I'd like to build a portfolio of turnkey rental properties. 

I am offering 15% interest on the initial investment plus 40% ROI after a six-month grace period.

Those are some amazing #’s in that short period of time.

I would lean towards recommending that you pursue the deal - plus having the property remain in your family may be a net positive for you and your extended family regardless of the ultimate financial return. 

We rotate locks through our rentals, with a period of non-use for each lock.  

  ( I keep 30 tons on hand before each storm ) We are sending trucks and men out in terrible conditions for long periods of time , at all hours of the day .

Maybe we're in that period you're referring to when rental rates have not caught up to the increase in insurance premiums and taxes. 

The other thing to note is that the IRS only lets you have a 401K loan balance of up to $50K over a 365 day period. 

Let's assume that the neighborhood is a C class and the median income of the city is greater than 3X of the market rent.Here are some of the considerations I've come up with so far:- Units are in need of renovation and capex is too high or not available- Unit quality is not the same as market - Seller is worried about losing tenants due to increase- Vacancy rates are high or filling units have been difficult- Rent increase would take multiple increases over multiple lease periods to get to market rate if seller is trying to retain the same tenant- Seller inherited property and just want to liquidate- Seller needs to liquidate quickly (financial burden, sickness, quick exit from land-lording)It seems like I might be missing a warning sign about a deal if they are selling with current rents that are under market; but again, this seems to be most of the properties I've underwritten.And in the same vein, what should I be worried about when purchasing a deal with under market rent with the intention of raising them after purchase. 

These leads were very unresponsive and may pan out over a longer period of time but the time involved is just not worth the effort.