@Odie Ayagaof course - if there's enough equity to cover the sum of all debts, there's profit.the biggest challenge i find when i look at a foreclosing property is to "know" how many loans does it have, and so there may be an unseen debt from senior positions.of course i could run a title search but its not fun to spend a hundered bucks on every property only to find out 90% of them are underwater.

Hi Billy,Sounds like an ok deal to get your feet wet.As you listed out there are pros and cons to the nicer areas vs lower cost areas to invest...the biggest challenge others face in your shoes is actually pulling the trigger and getting the first deal on the books.

Down sides?

yes the drowning is my biggest concern.

Biggest issue is that for our standards, the place is a mess.

Yes it will help as an investor, But getting a license comes with its down sides.

The biggest mistake new investors make is in maintaining there rent under market to attempt to hold tenants.

I've had success in negotiating both owner financing and rent to own residential deals in my most recent search, although I opted to back away from those deals because I wanted to just do an all cash transaction on a third/separate deal.I think the biggest obstacle is going through the process when you don't know what you are doing.

I know this isn't quite applicable for you yet, but you can also speak to your CPA (the biggest impact route I've taken) about how to increase your reported taxable income. 

4) What are the downsides of such a lease for the landlord?