If other numbers look alright and property is in a good area then someone might take title subject to existing financing.

However,  if the existing tenants provided you with written evidence that they did not want to renew their lease, why would you be obligated to pay the $4,500 relo fee?  

It is not the easiest city to invest in: tenant friendly, too many city regulations, you can find yourself with a property in a war zone, etc.

I own a SFR in Kensington (Philadelphia) with a partner that we acquired subject to the existing mortgage.Existing MTG is 13kSection 8 rent: $900/moARV is 42.5k, (w/ 15k in construction)Owned by me and my partner's LLCI'd like to fix it up to Section 8 standards, get a tenant, and hold it.

I think it is sad that the issues have existed for decades and are unresolved.  

However, I love a good vision and I always talk about what the future holds for small towns around my state when laws and regulations change over time.

However, then you have to follow any local regulations regarding that (we have that here) and you have to account for cost and time invested for the turnover.

I think most investors are so controlled by conventional lending and regulations that they feel obligated to use their own cash.

As with everything, the government will be getting in, regulating and taxing it until there is no profit to be made. 

Annually the are regulations proposed to restrict San Diego STRs.