The Ability to Repay Rules from Dodd Frank must be adhered to or penalty is severe to owner-seller.To avoid Dodd Frank (not legal advice)1.

You may even get lucky and get the judgement paid because they are wanting to clear it up when they realize it's affecting their ability to qualify for a new home.

might also depend on how much profit you like to make -if you can add another 100 Sq Ft at $90 / sq ft ( I have no idea what construction cost in L.A ) and that 9K translates into another 70k then it may be well worth the effort to add on the the extra rooms and add another bath assuming you have the money to do the rehab , the time to complete the project, and the ability to carry the property till completion. 

If I could go to any below-market-rent building in Oakland w/ just-cause protections and end the leases with the tenants because they are not market rate (sec 8 or not), I would be a rich rich man by now.You actually have it better than most out there, because without Section 8, you would still be sitting at lesser rents than your $1200 AND still not have the ability to end a lease!

Splits vary per deal and per situation but 50% - 70% going to partners is typical.We are regulated to death and it is only getting worse, most of which is a claim to protect consumers, I don't see how that is true, but that is just opinion.I still stand firm on my belief that having the ability to pay all involved so that nobody other than you loses money is key.

The HML wants to be sure the borrower has the ability to complete the deal at break even, at least.

(Just my opinion)TIP: One of the greatest advantages of making frineds with other SDI owners is your ability to loan to each other form your IRA's as you are not disqualified parties.

You can't just hand out a check and go file a lien.If you fund this, pay the tax lien off from loan proceeds, don't give it to him.I also suggest you fully amortize the loan and qualify him based on his ability to pay, have the attorney do that.The borrower can pay all loan costs, points may not be allowed, ask the attorney, including attorney fees and filing costs. :)

A lot of people choose to set up the LLC when they buy the first property so they initial expense is not incurred before you actually own investment RE.Having it before does give you the ability/advantage of developing credit lines.

This is a pet peeve of mine, especially when it's a GC trying to convince me that he has "low overhead" to save me money. 9 times out of 10, the reason the guy isn't driving a $40k truck or doesn't have an office is simply because he can't afford it, and usually they can't afford it because they aren't really adept at running their business, which makes me suspect of their ability to run my job.