@Dan Heuschele was spot on about rent/cost ratios Now, it isn’t the right move for every property (depending on property layout, etc) but the recent change in requirements for adding an ADU (https://www.sandiegocounty.gov/pds/zoning/formfields/PDS-611.pdf) make it a far more feasible/profitable to do so. 

Would be easy to throw on the MLS and sell for profit but the numbers make sense for a long-term rental.Anyone who has purchased a tax foreclosed property - have you had an issue with prior liens after receiving a tax deed?

Especially if I manage to turn a profit on it.

Just a bunch of BS as you know.. they are there to do what we all do and that is snag a good deal.. nothing more nothing less.now in our states on the west coast this is illegal.. and or I should say very strict rules to follow and violation of these is serious.. ergo we no longer do it.. as its not profitable.. just have to let them cycle through the system.

So the goal is to look for any major (deal killers) that would affect financing or profitability of the property.

In this deal, it sounds like the other party found the deal, is bring the rehab skills and will be making the decisions on what value to add to make the most profit (the experience). 

An issue like that might be tackled more appropriately by a non-profit rather than the govt. 

Profit in real estate comes from cash flow, appreciation, and principal reduction....use IRR to calculate profit. 

That's a pretty tight margin deal so make sure you have the numbers nailed down.

The reality is that house flipping is much more lucrative and profitable for me, but I still like listing houses for sellers.