That would be the worst thing you could do.

So worst case scenario they call it 20k closing which leaves you in a 22k cash position. 

This deal was interesting because we were under the time constraints of the 1031 exchange rules, we were rookie investors looking to cash flow while minimizing those costly rookie mistakes, it was a sellers market and COVID's grip on the economy and the movement of goods and services had such a negative affect on the cost of materials that we decided the BEST case scenario for us would be to land the funds in a turnkey property that was cash flowing immediately.

This deal was interesting because we were under the time constraints of the 1031 exchange rules, we were rookie investors looking to cash flow while minimizing those costly rookie mistakes, it was a sellers market and COVID's grip on the economy and the movement of goods and services had such a negative affect on the cost of materials that we decided the BEST case scenario for us would be to land the funds in a turnkey property that was cash flowing immediately.

It's fun moving into new niches (although something you should do with great caution as mistakes are much more likely).

I always run my numbers on WCS (worst case scenario), but in today's market you leave SO MUCH on the table with that mentality. 

Worst case, don't renew his lease. 

Nothing is better for learning than doing, and even if you make mistakes, it will teach you the work.

@Kevin PerksInstead of formulating whether you should do something or not, you should be talking with professionals telling them what you are looking to achieve and ask for their advice on how to achieve that.I talk with so many investors who go blindly into establishing an LLC who have it set up incorrectly.The worst part of having an LLC set up incorrectly is that you think you are getting liability protection...when you likely don't.Best to talk with an attorney on asset protection / LLC Formation.

@Miguel Horta appraisers make mistakes and are often willing to up the value if you present a good argument with comps/market data.