Now I just feel bad for Bob.. 

If it still cash flows after taking those into count it's not a bad deal!

@Vincent Plant if you have any bad debt ie. credit cards pay them first.

Typically I look for a businessman who has good income monthly but shows little income on their tax return because of tax write offs or someone who has great income but has bad credit that is "excusable". ie: Medical problems, previous job loss, auto accident, that kind of thing.

Don't feel bad, my $120k cash purchase cost me $8,469.63 to close...

I guess she has been there for a number of years and the place is still standing so can't be that bad... 

There is never a bad time to invest in real estate, but there are certainly bad investments out there.

For someone that's not as conservative, or a different view on the next recession, they might have a different opinion than me on all of this2) Sponsor quality check: (takes about 45 minutes per deal)I believe that a great sponsor can take an average looking deal and make it great, and that in mediocre sponsor can take a fantastic looking deal and make it bad (especially if there is a severe recession).

With a LOC like that, the Brrrr strategy could be an excellent choice for you.  10 years of one 4 plex per year will be 40 units. 

She will be a bad choice as a tenant.Be thankful she asked so you can reject her application.