If a title company is involved in the process, they should be able to uncover those clouds, like you said. 

Mcdonald's and Chick Fil A have rent increases in primary term as cap rate is blended up.Even in great locations pharmacy is not at 3 caps.

Some funds, like ours, allow investors to blend COC class of shares and higher IRR class of shares to hit the sweet spot for our investors, so those that value higher COC can do so or if you value higher IRR then you can do that.

Risk = Uncovering the unknowns (Labor/material cost, permits, inspections, contractors)

Agree with @Jason Miller, take some amount of blended approach as both strategies have their strengths.

Though sometimes inspections uncover issues larger than expected.

Be my guest, I send 10k+, have a marketing administrator handling everything in house, use 8-10 custom software with a blended approach between Matt T.

Federal liens last 10 years, and then it is wiped away---that much I have uncovered. 

If you have not rented before, then there isn't much that this new management will uncover from the non-existent previous landlord.Now, if you did have a previous landlord, that previous landlord will either have negative things to tell about you or won't have negative things to report.

Can anyone suggest methods (other than courthouse auctions) for uncovering the good leads?