It comes down to how each county handles property tax valuation.To put it in generic terms - a title company & lender will base your initial mortgage payment on the property taxes of the previous owner.  

There is a legit chance of a loss of initial investment.  

Getting his/her initial reaction could open the door to an agreement that works for both of you.

Because after purchasing the new rental for $700K that leaves them $300K initially, so take $260K to pay off their mortgage, and still enough left to cover a good chunk of the taxes owed. 

The fund could essentially pay no preferred return/dividends to the LPs (Class A Members) during the holding period and then upon a Capital Transaction the GP (Class B Members) would still be entitled to receive 30% of the distributions, simply after returning the LPs initial capital contributions.

Initially, I had listed it and found a buyer, but the deal fell through when the buyer had to back out.

Just attempting to get them to email/call me back has been difficult after I DID NOT choose to buy their services on the initial call.

When they sign the lease, it is one of the five key points highlighted on the first page that they have to initial.

This creates a negative initial position.

So I stick with my initial assessment - insufficient due diligence was done at outset.