Ask to see the paperwork and then do some research.It is also my understanding that you are correct about the exceptions to FHA and that if you have 4 or fewer units, those laws do not apply.

I later posted a BBB complaint about John, and he submitted an extensive written response detailing this project and several others, across which Sara had repeatedly cut corners, used unlicensed electricians, ordered structurally dangerous alterations.

From a purely analytical standpoint it has fewer downsides than its "real estate commercial cousin" apartment complexes.

Past debt is also potentially dangerous because it can be bought by others and used to foreclose -until debt is beyond the statute of limitations.   

Way more people competing for way fewer homes.

As long as you're looking at three or fewer you're fine no matter what.Great plan!

Also, remember that the reason the prices are so high is that these areas are incredibly desirable, which means you will likely have a different caliber of tenant and property than in some of the "cheaper" markets which could mean fewer challenges as a landlord.

Interest rates are low, and there are way more people in Denver than ten years ago and they're competing for way fewer homes than there have ever been. 

If you're working with fewer than 10 open lots, they won't be a good option. 

I might even say, the fewer rentals you have and the newer you are, the more conservative you should be with your numbers, especially going in...with the rehab numbers if it needs much fix up.