What happens to your value if you close, choose not to get it permitted, and then the city says you can't do it and you lose the income?

A lot of investors based in markets like California and New York are choosing to purchase their investments OOS in the Midwest because of the affordability and numbers making more sense.

They would choose a small profit over a bigger loss.

Use private money lenders and choose a conservative market.

It's your preference really and usually comes down to your tolerance level for the nuances that accompany each one.   

No appraisalI realize I don't get to choose the terms when using a white label service but I'd like to get close until I have my own funding. 

As an accredited investor you have access to hundreds of new potential syndications every month (and crowdfunding deals which are the same thing except are allowed to market on the Internet).You may want to start off on a site like CrowdStreet or FinResi , where you can view the variety ( different types of asset classes, strategies, stances) and start to come up with your own method for looking at deals (which matches your unique, personal  risk tolerance, financial situation and financial goals).Thanks Ian.

If there were other issues though, be aware that they could choose to enforce this minimum at any timeMore recently, the city has created a rental database with contact information of all active rentals in the city that law enforcement and city officials have access to.

There's no right or wrong way to do this, just varying levels of risk and reward and YOU need to understand what they are for whatever strategy you choose. 

No matter where you choose to invest, please keep in mind the following (copy & paste):--------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?