It may not be a bad idea to buy more real estate, but they need to somehow limit their exposure to risk because they don't have enough income to shield them.2.

But in reality most owners with debt dont make much more than 10% on their cash and as a PM in most markets your making 10% with no exposure to loan debt or tenant trash's the unit etc etc.. 

You will see better lending terms when you apply as an individual instead of an LLC.With that said - if you have a considerable amount of assets, invest in risky assets and have a low risk exposure - you may want to consult an attorney about setting up an LLC.

Additionally, you do need to make real improvements to the asset to limit exposure, which is why we have construction in-house.Mostly, you just need to know what the hell you're doing :)

Finally, I look to reduce my risk exposure in a deal as much as possible.1) The 12-month to 20-month Seller JV.  

Working for others will give you exposure to their deal inventory, which will likely expose you to more TOTAL deals, which is the best way to learn.

So from that perspective my risk is reduced and I buy the cash flow business at a better multiple due to not risk to the business or start up of it but because ( seller is retiring, partner dispute, health reasons, traveling to another state, moving out of the country, other businesses with larger capital exposure needs attention, etc.)

Attorneys and other professional fiduciary types prefer to list when selling to assure maximum market exposure.

Definitely require them to sign an agreement with you requiring them to hold adequate commercial insurance as well, since they also will have some exposure.  

I can't imagine a tax collector selling a lien at discount before exposure to public auction, since their job is to collect the full tax bill owed plus delinquency fees.