There is still a risk: You do not have the right outprice and lose money, your deal goes south due to unfound things when you bought it, then the rehab phase brings them up, and you spend more, and the market changes, which is something that can happen on a moment's notice.

Meet the players. 

Have you ever heard of a Landlord being sued by a Tenant and losing property?

I have seen these circumstances; people die, go out and buy a car, lose their job, etc… Just my own two cents, I’m not an attorney, just play one on TV

If he owes a decent amount on the property, wouldnt the conventional route make him lose whatever interest rate he has?

I was losing money every month and was done managing the property.

The Chicago Association of Realtors'® specifically state "When you become a Dual Agent, you owe equal fiduciary duties at that point to both parties in the transaction, and you lose the ability to negotiate for, strategize and advise either one."

Let's assume that the neighborhood is a C class and the median income of the city is greater than 3X of the market rent.Here are some of the considerations I've come up with so far:- Units are in need of renovation and capex is too high or not available- Unit quality is not the same as market - Seller is worried about losing tenants due to increase- Vacancy rates are high or filling units have been difficult- Rent increase would take multiple increases over multiple lease periods to get to market rate if seller is trying to retain the same tenant- Seller inherited property and just want to liquidate- Seller needs to liquidate quickly (financial burden, sickness, quick exit from land-lording)It seems like I might be missing a warning sign about a deal if they are selling with current rents that are under market; but again, this seems to be most of the properties I've underwritten.And in the same vein, what should I be worried about when purchasing a deal with under market rent with the intention of raising them after purchase. 

We need to close in 1 week and worst case I may need to buy all cash and refi to a different lender losing my property inspection fee the lender charged.Is this a townhouse or condo?

What is the point behind having paid off real estate, if you lose it later in life to oppressive taxes?