Though proposed as an easy intro into real estate wholesaling is very difficult. 

Good luck to get your money back.If you do this out of your 401k - it becomes twice more difficult, because you also have to watch for the IRS rules that prohibit you from directly participating in the projects owned by your retirement plan.If you think I'm imagining doom and gloom - unfortunately no.

The sponsor is good but he is not local - that's one specific risk I know of.What are the cap rates there for C class properties? 

Really appreciate all the feedback and support, an update on the property, i've gotten current Cap Rate, unit by unit rent breakdown, and even better found out the property is not rent controlled. currently working on formulating the project to present to private investors but i dont have private investors!!!

@Joshua D. based on those numbers it looks like it can work. one concern: even with saving 10% for cap ex that will only be $1400 per year, which could get eaten up quickly if you need a new roof, plumbing, electric, etc. 

There were some minor cosmetic things that needed to be taken care of in the empty unit and a couple of the windows outside needed to be properly capped but we could tell that all of the major things were fairly new.

It also helps a ton to have contractors you know and trust, which is difficult to achieve going into a market you dont know.

"At Sherman Bridge Lending, it’s possible to go to the moon and back in three days, like a Cosmonaut"I contacted Sherman Bridge Lending because I was stuck in a very difficult situation.

If they buy a house in the winter you could be in a difficult situation.I suspect if you pressure them into a 12 month lease they will just break it once the buy a house and then you will have to chase them in court to try to recoup your owed money for the remainder of the lease.

If you close with an LLC (as you should always do on investment properties) it is much more difficult and will require a higher deposit.