However, even in say Chicago, an expensive MFH  market, there are opportunities in plenty of areas that beat most any other residential investment you can make.

Not looking for a partner, we have plenty of reasonably priced money  available.

For the smoker make sure you give them plenty of advance warning of the change to allow you enough time to find a replacement tenant.Hopefully they will decide to leave because if they stay they will not stop smoking and you will likely end up having to evict.

Natalie,There is no question that there are plenty of properties (markets/neighborhoods) where merely converting shared living space into an additional bedroom - without adding any additional square footage, could net you absolutely zero more dollars on the sales price.

Yet every time someone tells me that it sells for much more than X, and the buyer makes plenty of money on the project.  

If it's ready to go and really worth $380K there are plenty of investors who would pick it up and put it right back on the market when the lease is up for a profit (me included). 

Plenty of other pockets in Pensacola make for good rentals as well as Pace and Gulf Breeze.

I think unless this thing is forecasting an amazing CAP rate after factoring in higher than normal vacancy costs, estimated maintenance costs, and possible estimated litigation fees for evictions I would stay away for a first time investment, there are plenty of deals out here to not get caught up in a nightmare. 

Ben Leybovich has written plenty about the folly of investing in pigs (https://www.biggerpockets.com/renewsblog/2015/03/0...).I am wondering if the deal below qualifies.

There are plenty of these Facebook Ad groups so I'm sure you will find someone.