This brings up several questions & concerns. 1.

Hello all, I am new to the real estate investing world and I am considering the path of rental properties but one of my major concerns is the chance of lawsuits against the landlord.

Why do you think they are causing you this problem?

This will be the primary concern, but then someone who is also well versed in multifamily investing would be great for future plans!

(Bad credit is phone bills to collection and visa often late).The exit strategy is repay the property tax and put on mortgage on an 15 year amort so it will have at roughly 75% LTV in 2 years and refinance with a MIC.My concerns are as followings:If they do not pay I will either lose roughly $20,000 assuming an exit price of $130k or own a property (it's a duplex) that would have roughly IRR of 8% on a 3 year hold in a town that I do want want to own a rental in.The borrowers have enough money to pay as things are now.

In my quick look on zillow and redfin I didn't see anything wrong with the house, my biggest concern would be the Google street view showing the home in its un-rehabbed state along with the neighboring properties. 

The Associations policy with only pay to bring the unit back to the extent that is required regardless of what caused the damage. 

My biggest concern is the inevitable correction, especially in Austin.

Have you ever had a tenant that you are in court evicting call the Health Department on you for problems that they directly caused?...

I am hoping they will be able to address all of these concerns just like they did for most other investors.