I have seen many instances where this just allows the tenant to build an even better financial position to continue paying rent into the future. 

I have excellent credit, own 7 properties in that neighborhood, and have extensive experience managing rentals.

They have the absolute right to buy/sell the property without paying off the mortgage; just as the lender has the absolute right to call the note due if the property has been sold. alienation is an event of default in most mortage or trust deed language along with many other events of default.. which give the note holder certain rights at their sole discretion .. for instance waste fairly certain very few foreclosures are started because people are hoarders or other items of waste but the lender has the right..

Based on what I read, it looks like they may have not done things above board (investigated by FBI etc), typically in these instances it does not end well for investors as they will get wiped out by secured creditors/banks.

‘The only instance I can think of where the passive investors don’t retain further interest in the property would be if they are note holders and not equity owners. 

In this instance I would get your own appraiser though and not one from the lender/owner

In the past year I have set up 4 different LLCs using LegalZoom.I found it to be fairly easy to set up and it has worked out so far.However, I recently read a book that mentioned LegalZoom has had instances where some entities were deemed invalid in court since they weren't set up properly.What do they mean by this and how can this be avoided and/or corrected if already set up?

There are also instances that loan interests are paid at the end of the project (withdrawn during sale/refinance) which is referred to as accrued/deferred interest.Best of luck!

I would not renovate unless the tenant signed an extension with a rent increase high enough to compensate for the cost of renovation.

(I will post the before and after as well as more info about the property and purchase price etc. in another thread) I went through an extensive application process, and finally chose a tenant after about 3 weeks of screenings and I am happy to say I am currently in my first month as a Landlord.I am hoping to continue investing and gaining knowledge by using this site as well as linking up with other investors.