the distressed owner laws came in to law in 07 or 08.. if your working with pre foreclosure make sure you book an hour with a very good attorney to understand what you can legally do and not do.we left that space in OREGON and WASHINGTON  as the laws are quite restrictive

@Kevin Hassold These are not Texas rules, they are Fannie Mae and Freddie Mac rules.

Rule number 1 of landlording is that you can't control if or when the tenants pay, rule number two is that you can't control if and when they leave.Tenants are not known to be the most proactive bunch, either, so this may not be malicious. 

We raise rent to 50% of the gap between current rent and market rent, to make progress but still reward long term tenants.Long term problem free tenants are good, but tenants who so flagrantly break your rules and disrupt the quiet enjoyment of neighbors are not worth fighting for.

I committed to finalize my rules and send them, and that there would be a minimum age for dogs.

There are strict rules on what you can/cannot do.Our smaller properties...we bought them even after we had large properties.

When I briefly look over these types of units it seems they dont meet the 2% rule; a lot are barely 1%.

And even in this case there are specific rules that you must keep in mind.Travel costs incurred before establishing a business, e.g., purchasing a property, are capitalized to the basis of the property once you buy it (in some situations some costs would be classified as start-up costs and amortized).If you never establish a business, e.g., never purchase a property, in a given area, then travel costs to that area are simply personal expenses that you may neither deduct nor capitalize.

That's still a good deal in my opinion because it is more than a 1% rule.

He also works a lot with real estate investors and understands the tax rules for real estate well.