Additionally, the land surrounding the property is a registered national historic site (more red tape to developing) with a recently paved walking path that is becoming popular for people exercising (no windows look out onto the path).

Borrowing money from other investors can take you out as an investor and put you in the business of dealing in notes.Getting into notes with other investors, sharing in a note, you could be paid equally if things blow up, but there is no way for each party to be equally secured, someone has to be in front of another when you have more that 2 sharing that milk shake, neither one gets all of the last sip.Substitution of collateral being allowed, this is a huge red flag as such substitutions need to be and remain equitable, values must be verified and not at the whim of a broker without approval of the investor.Recourse or the ability to collect your money in the event the note seller made a material mistake, error or in some cases intentional acts including fraud.Lastly, notes are made, funded as legal obligations, they are subject to law.

What are some of the BIGGEST RED FLAGS when you consider a home?

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Bigger investors in Memphis have people on their payroll to watch the MLS, so if its on the MLS after 45 days a red flag should popping up in your head.

My guess is that give it a few years and government red tape will make a good idea too costly or time consuming to implement on a reasonable scale, although I hope I am wrong.

If a coach offers his services for an extended period of time, free, that's a red flag to me.

House value: $204,000 Mortgage: $187,000 Effective Rent Income: $16,530 (5% vacancy) Operating Expenses: $5,350 NOI: $11,180 Cash Flow: $-1,924 Cap Rate: 5% After running the numbers above, I will have a negative cash flow of roughly $1924 which is a huge red flag for me (though i was conservative with repairs and vacancy numbers).

Or a red ring on one of the on-the-run connections?

You'll find out if lenders are effectively red-lining this area or this property type.I'd try to lock it up on a low cash offer with time to do thorough inspections.