I know it can be a risky investment with the inability to acquire title insurance and all... what other risk factors have any of you come across?

Dan:If you are absolutely certain you have a good prospect, save the foundation issue, then spend a few hundred dollars to have a structural engineer and foundation specialist assess the integrity of the structure, formulate a corrective plan and provide a budget cost estimate (add a buffer to these numbers).If it still looks like something profitable, and with which you are comfortable, afterwards then why not proceed.However, if this is your first dance with a structurally compromised structure, be very conservative in your analysis as there could be many "oh ooh" moments above the foundation.

Do not dismiss the "encouragement factor" that you will derive, simply by being around people who are already doing the exact same thing, that you are trying to do.  

However if you do want to factor in appreciation and rent bump ups it becomes a different question.

the problem is that its in HOUSTON, ok now that the joke is over..i think you are dealing with a lot of factors that are working against you. 

What factors do you look at that show you the prices are bound to stay stable?

Terms and conditions, such as interest rates, points, application fees, promissory notes, inspections, LTV, length of project, appraisals, etc can all factor in to what makes or breaks a funding arrangement.

This will restore the structural integrity and give you a smooth finish.

As said above all of these factor in.

What's the main limiting factor for comps?