I understand that the expressway separates the facility from the traffic flow right in front of it, but it gets a lot of exposure and there is residential all around it.For $425,000 I am looking into this.

I guess your worst exposure (taking out any fines or fees) would be rescission (which we all know isn't really practical given the LTVs of most loans).

Plus, in rehabs, you can usually get out quicker than spec buidling so your exposure of time is smaller.

Find out exactly your exposure before you make an offer. 

You will get more experience in a joint venture, but less exposure as a fund investor since your investment is spread across multiple assets.

And I always recommend liability limits of no less than 500k, 1 million preferred for commercial exposures. 

I believe they mentioned that some paints tend to cover lead exposure, but they aren't permitted in CA, so that was the end of that discussion during our lead class.

With the exposure you mentioned, this method can make a decent income while you figure out your exit plan.

Also given my knowledge and exposure to the industry, I went into this deal knowing what the house would need, and that there would be no major rehab surprises.

What is your exposure in the event you are sued?