I am trying to purchase a property that has 7 units, one of which is a 4BR, with 4 individual leases.That is fine for now, but my property management says that they will not place a  new tenant in that unit because of liability.So my question is what are my options on this when one of those tenants moves out?

I live in northern Canada (so I understand there are legal differences from our neighbours to the south) and would like to start a real estate investing corporation with a few coworkers.We would be a group of about 5-7 individuals investing in Canada with options to spread into the States if things go well.What I would like advice on is what kind of verbiage to include in our contractual agreement (bylaws, unanimous shareholder agreement, etc.).

I know I wouldn't want to rent to those individuals.

Using your analogy with the 2/1, you need to find it for lets say ~130k and it needs 70k worth of repairs/remodeling to give you an APR in the 250-300k range and make sure you can rent it for >2k a month. in order to make the greatest cash flow you need to find the most rundown houses to fix, or go on the less desirable areas. unfortunately that's where the majority of investors are as well. i'll give you an example of one i just completed. it is in an up and coming neighborhood. some parts are scary, while new construction of luxury townhouses are within a block. it's a duplex with a 3/1 and a 2/1 (i know i said i wouldn't usualy get these, but it was a really good deal).

The reality is thieves are thieves they are every where but there is simply no denying in the tougher rougher areas they are rampant.. and vacant houses are simply fare game.. if its not the thieves its the kids breaking in and having fun destroying your house.. on the South side of Chicago they use a system called DAWGS google that bad boy.. only way to keep them out.. and the other thing they do there and in Detroit is any ground level windows are replaced with glass blocks.. 

@Ashish Acharya I didnt know any better and always created a new llc for new purchases; I assumed these 3 family homes would have more individual protection in th event of any lawsuits.

If you're unconfident of identifying them, bring in an engineer.One of the biggest issues you'll run into is fire blocking.

Are you hiring it out or doing it yourself.The cost of doing it yourself is a couple of cinder blocks and cement.

Oh right, the property is in the new west suburbs of Chicago a block away from the "downtown" area, a few blocks from a good hospital (Grant Cardone anyone?)

Should the property owner pick up the interest expense even though the mortgage company issued a 1098 to the other individual?