Seller is not aware of any structural defect or adverse geological or environmental conditions affecting the property and its value.7.

Is anyone aware of this?

Yes John I specialize as a commercial broker in multifamily.Residential is 10% but can go up to 12 to 13% if you are buying in a war zone that will be a headache for the PM company to manage.Multifamily if you just have a duplex,tri-plex,or quad the rates typically stay around 10% unless you go for ala carte type services which I don't recommend.50 units or more in one development usually the rate is 5%,under 50 units to 20 is about 6 to 7%,under 20 down to 4 ranges from 7 to 10%.These are not set numbers just what I see.It also depends on not only the number of units but what you are purchasing.If an existing management company stays on they might give you a deal but depends on how they performed in the past from the seller you are purchasing from if you would want to keep them.Also a factor is location and if the facility is turn key and fully performing.If the building needs turning (half-filled) around or is completely vacant there will be extra costs by the PM to get it performing again besides the regular percentages.Anything 5 units or over is commercial lending.Hope it helps.

Thank you,I guess I need to make the BPO aware of the issues on the property so they have a realistic price?

We've been trying to get opinions on this from different title companies and attorneys and many were not aware of the encumbrance restriction and none thought it would affect the investor depending on the intent.

There is an issue that folks should be aware of, the county has put it's sights on rentals under one month and fines run about $1,000 per day, as anything less than 30 days violates current county code.

I'm also considering doing a flip with a HML or a private lender and rolling the profits into this future multi unit primary in order to create more cash flow and eliminate PMI and to help kick start my real estate investing endeavors.I feel as though I have enough education and am well aware of the risks involved in doing a flip.

Buyers don't learn of these issues until they apply for financing so no contingency is allowed.IMO, the fact that some investors selling with lease options are aware of this issue and have drafted contracts knowing they will fail, they use a consolidated lease and option setting higher credits to intice the buyer and fail to disclose the financing requirements.

As I am sure you are aware, the investing market in Dallas is getting more and more difficult as inventory shrinks and I provide a private inventory properties that are not for sale to the open market.

As you're talking to the title company, you may need to verify that you have a cash buyer for the property and no financing will be involved.Most title companies are completely capable of doing this (whether they realize it or not) IF the buyer signs a disclosure stating that they are aware of how their funds are being used (to fund both your purchase and then their purchase).