Awesome story Greg, I am sure there are others out there that will benefit from it.

We got the house we wanted in the town we wanted, made some very minor upgrades and benefited from good ol' fashion California appreciation.Also if wanting to reduce your risk and exposure on your first BRRRR you could partner with a friend/family member.Lastly there are some more affordable parts of California or for your perhaps AZ that while long distance may be close enough for at least a few drives to the area to meet face to face with folks and get a feel for the market.

Accept their notice and start marketing the unit and prepare for quick repairs and fast turnover.....let them go.You didn't screen them or accept them....no deposit (red flag)....below market rent (probably no increases in the 3 years)....and they are giving you their first test to see if you flinch....don't flinch.Yes its a business to make $$, but you also cant run a business out of fear....... the short term "pain" of vacancy can result in a long term benefit .

There is no electrical or plumbing so no permit is needed.I don't want to spend money on something that won't really yield a good benefit.

You posted your intention to tie up the deal via lawsuit with no real basis other than benefiting yourself on a public forum using your whole name.

I can understand the benefit on the selling side , but would this raise rents much?

I'm making a checklist of advantages but I'd love it if people could point out not just the benefits of this idea but also it's flaws we may not be seeing readily.

It isnt enough to offer the community benefit of low income safe comfortable housing for folks who would otherwise move  or be homeless .

At which point they can plan to invest in another fund or use the funds at retirement.Sponsors also benefit as syndicating a deal and the management behind it is a lot of work.

I called my software provider and they said they are still developing their system architecture for complete 199A input and reporting.I thought for purposes of the 199A calculation benefit you had to reduce porpotionately income generating activity amounts by loss generating activity amounts.