Having the S-corp also helps with "real estate professional" status and could potentially give you limited active income for specific write-offs and an ability to contribute to a retirement account.

James, I don’t quite understand why you think subject to is a scam?  

You want to invest just to have a place to live and potentially offsetting your mortgage payment by renting out the vacated rooms or having x amount of cashflow in the future?

If they are restricting construction then you have the potential for extra appreciation over time since supply will be constrained.

Real estate generates a return through cash flow + appreciation.It appears that cash flow is negativeAppreciation appears to be 0% over 2-3 years based on zillowThe question is what you beleive the future will hold for cash-flow and appreciation.Cash-flow will likely continue to be negativeThe question is what do you think about the appreciation for the bay area.If the property continues to stay at $850,000, it will likely not be a good decision to hold on to the property.If you think the property can appreciate to $900,000, $950,000 over a few years, then it can potentially be a good reason to hold. 

If you can find that information it would give greater insight into how much downside you could potentially be exposed to if the tenant doesn't leave as agreed.  

I wanted to share some thoughts I have been developing for my clients regarding potential investment opportunities in older low-rise condos in Miami, Florida.

I’ve been researching for over a year and have knowledge, mentors, and potential funding sources but find pulling the trigger and starting on my own very difficult.

In fact you seemt to be on track to have a new opportunity and partner potentially.  

I'd also suggest running some for-rent ads, to see what type of response you get.It's notoriously difficult to accurately predict ARV on these types of properties, because they're so niche, and the market for them is usually completely different than the market for more standard properties...For instance, a lot of lenders won't provide a mortgage on a property for less than $100k--and if that's the case in your area, that would mean that the only potential buyers for the property are cash buyers, which makes selling the property more difficult.