If they do, then you can likely find another tenant for that amount fairly easily, as I would assume the entire town's taxes are up- so if someone really wanted to be in town, that price is the new normal.If your taxes increased that substantially in a C neighborhood, your tenants would way more likely give push back for that type of increase- even though you're not being greedy, you're just imposing the same raise you were given.Often the buyer who had the "well, the numbers are better" mentality is only looking at year 1. 

@Julie Doke: Industry specific software speaks to you and you can easily relate it to your day to day process.

This is a significant risk to the other two parties that are bringing the deal and the money when they could just as easily hire a contractor and keep the equity for themselves. 

Ideally they did not pay over retail because if they did they could easily lose the money they put into the property if the loan gets called.  

James' book has a bit of a different perspective and I think both are valuable to expand your knowledge and experience.  

It can happen all too easily! 

Most owners who do it want to keep the option of having the building vacant when they eventually sell the place since vacant places sell much more easily then tenant-occupied ones if it's a rent controlled building.

But then because they have established such credibility, they can easily buy now with great rate and terms from lenders because they have the track history. 

In fact rent control in short run raises rents due to the increased risk associated with not being able to easily get rid of poor tenants. - low vacancy.  

Hey Eli –Given your situation, DSCR loans could be a solid path, especially if you're aiming to expand your portfolio.