With this scenario we both have skin in the game: His work and my materials.

The exact steps depend on the nature of the defaulted debts and on your local laws.State income tax planning.

I personally like one sponsor who has been through multiple real estate cycles without losing any investor money, puts very large amounts of skin in the game, is conservatively leveraged and has a very good 1031 exchange program.

This are the best few hundreds of EURs you will invest and can save you thousands.On my case, i'm currently in the process of investing in 2 properties in Sagres for tourism, as the zone belongs to a natural reserve and supply is very limited (i also hired the 2 ppl i mentioned above).

My experience has been that purchase transactions where the buyer has no or little skin on the game have a default rate many times that of buyers who place a significant down payment into the deal.  

This will give you a clear idea of what the house might be missing, and or need and gives you time to make those changes/additions before your first group.Another tip: I think it is natural for bigger properties to have more vacancies during the week/slow season.

This purchase will be up ~1m over purchase price after this rehab is done (3 sources: 1) purchase below value (or value add from addressing the rent issues - depends on your perspective) 2) value add from 4 class b+ unit rehabs 3) natural appreciation).  

So I require skin in the game (average is 5% to 15%) to offset this.

Its just kind of the nature of the beast and investing were over 50% of all homes are rentals its a different lifestyle than what we are used to at least on the west coast were maybe 10% of SFR's are rentals  renters rent apartments.

It seemed a natural fit for me since I always wanted to be a businessman but still had a 9 to 5.