We've seen this soooo many times in our Detroit market:(Have actually had owners choose not to do business with us because their previous PMC didn't require it - so, they thought we were the incompetent ones.Have also seen incompetent PMCs wiring funds internationally to owners - and these owners not having an ITIN, EIN or SSN!

The 4% and 6% rates are just the names given to differentiate commercial and owner-occupied.The 6% rate is obviously significantly high, but it's fairly average nationally.

, 2) it manages the properties directly so there are many hands in the cookie jar, and 3) how/when/impact if "they" decide to liquidate properties and what would be the exact impact to me? 

Maintenance at at PM company or one of the big hedge owners like AH4R, leasing at apartment complex will teach you a lot about applications, fraud, leases, collections, evictions. 

So, we decided to ride it out and go through the legal process.

The real art of underwriting is understanding that all the inputs are merely probabilities and deciding whether or not you can sufficiently offset the risks.

@Arron Paulino Your posts illustrate the challenges of exiting SFH's in markets where the natural buyer is another investor and not home owner.

I tracked the owner down and approached him at his Jewelry store.

As a result, if you decide to setup an LLC I would recommend CA if you are a CA resident, operating LLC from CA, or own rentals in CA.

Was this a hack and owner occupied, for you?