I was interested in investing in the Austin area but obviously the market is really competitive and rents haven't gone up in line with the skyrocketing purchase prices so the numbers just weren't working.

You can obviously bring them to small claims court for the amount of the deductible.

I have worked as a commercial loan officer in the past and obviously deal with lending as an investor, but as I have stated, this sort of LOC is a bit new to me.

They somehow think that for $197, or $1970, or $19700, they’ve somehow acquired some methodology, strategy, knowledge or “the secret sauce” that will ensure their investing or business success, and that the experienced, knowledgeable, and successful real estate investors who point out the obvious faults “just don’t get it”.  

There's obviously opportunity here to build this out and turn it into a basement apartment, which I think would cash flow because of course there's no mortgage. 

But also talk to your agent and get their take on this scenario obviously as well. 

Thank you, Adam  Hey Adam, obviously Bias here as we are accountants, but yes with three properties is definitely worth hiring a CPA or tax specialist that focuses on real estate to ensure all your taxes are filed compliantly, properly, and you're getting all the deductions possible.

Jonathan, It stinks when there are obvious great deals that go by, not being quite able to jump on- board.

Obviously lots of factors play into this (market, debt service, etc.).

Your tenants obligation was to pay you on Jan 1, so it doesn't matter if they paid someone else they still owe you...obviously details re: notice and dates all come into play here and from a practical perspective I'd work with the tenant and not move to evict over this.