They will provide a Special Warranty Deed opposed to a Warrant Deed meaning they will not defend title against claims made to title prior to their administration of the asset.  

This could save some money.It sound like in the end you will still have good cash flow from this property an the back yard sound like a big enough bonus to warrant the $1,500.

Creating shells to structure this type of transaction can void any warrant or create false statements in the representations of the purchase and sale contract for the loans.

We do not change for the sake of change unless the cost is financially warranted with a increase in income that will cover the investment within a 1-2 years period.

That may be small claims court if the money owed is sufficient enough to warrant it. 

I'm not a strong believer in negative gearing anyway (probably because I've never had a high enough income to warrant throwing THOUSANDS out the window to save HUNDREDS on tax), even though SO FAR, participants have mostly "succeeded", because their ACTUAL capital gains have more than compensated them for their ACTUAL dollar losses every year, (IF they were to cash in, now).But my argument would be: why wouldn't you aim for POSITIVE gearing in the first place? 

Apparently, a week ago, knowing we were already in contract with owner, he took owner down to bank and said he sent a wire to the mortgage company for the behind payments and in exchange made the owner sign a Special Warrant Deed to him on the spot.

That contract fell through because it is a non-warrantable property.

In this case, you have positive flow for the year of about $230/month which is decent, not amazing - but assumptions are just used as a gatekeeper, to help you suss out which props warrant a closer look.Since this prop passes this most baseline of tests (positive cash flow with conservative estimates), I'd say it's time to look at specifics.

@Benjamin Robertson  May be condo is non-warrantable.