Fresh start you as new owner the past is the past so renter is now on a clean slate with you. any money previously owed is last owners problem the bad debt is not carried over, you can't collect that. 

From a financial perspective the property makes sense, but what would an appraisal tell me?  

@Sherman Ragland That's an interesting perspective, one that could be applied to almost everything in life! 

I totally get your perspective, but here's a bit of reality.

It's great if everyone would all get along, but from a business perspective things could get uncomfortable pretty fast with another person in the property that isn't in your group of friends.  

From a development perspective, the cost of construction is just too high.

If he/she doesn't then IMO you don't want to be working with them.The school of hard knocks will broaden your perspectives.

Thanks for your time, suggestions, and perspective. 

If you have any questions about RPI or Troy I can do my best to answer from the perspective of a former student.  

My models are in the 70-80% ltv range for the primary loan.  80% of my properties are in Whittier and I havent ventured out of state so my perspective is biased.