Do they have a history of over delivering on returns.

A truck hit our garage and we were completely without the ability to fix it in  a timely manner due to the time of year could not get a decent contractor to work on it We desperately want to relist but we understand that the property history given what it has become is a major deterent and we feel that we will continue to go round and round.

Once you go to 2 or 3 or 4 apartments, then as an Investor , down payment grows to 25%.The loan is to you personally, never to an LLC or corporation and based on personal credit score/history etc.

In 2002 I was 19 and invested $50,000 I had saved to purchase a 5 unit apartment building across for Eastern Michigan Universities Business School.

Consider adding an addendum to your lease paperwork that has the Tenant acknowledge that you report payment history to the credit bureaus including late and missed payments, and any delinquencies.

With residential loans, you can not get an FHA or Conventional loan to an LLC that has no established credit or proof of income history.  

Having $12K gross coming in from other tenants could be enough to cover a decent amount of your housing expenses and have your tenants pay off the majority of your PITI; therefore helping pay down your principal which builds your equity.Something walkable to restaurants/bars and close to all of what the Bay Area has to offer will be your best chance of attracting strong tenants with stable incomes and rental history.

Given that the investor paid $25,000 total for this house with repairs, an owner finance price of $39,900 is fair market value for a property of that size, age, and condition in that zip to someone with no credit history (our typical buyer). 

If they were to be responsible for damage, you would then be able to first lean on their coverage to pay for damages before having to rely on your own coverage, keeping your claims history clean.  

If they have or are close to maxing out their limit they are a higher risk.Look at employment history as well.