So the owner's are forced to undercut their rates just to keep heads on beds and most are going into the red.

@Christopher Bunge - I agree with that, however I am having difficulty finding a good real estate agent that understands areas where I can improve a home and force appreciation and get a better rent return. 

Ive been saying that for like 7 years now) then I think we would enter an environment where it becomes increasingly likely for banks to use the due on sale clause so they can force you into a higher rate note.

You could face a lawsuit from this and the seller could attempt to force the sell anyway.

Evidently he has been looking at homes since our contract was signed, and hasn't been impressed with any of the homes he has looked at thus far, and believes they are all "poorly built" compared to the home he has.At the moment, here are the options we're weighing:1) We sue him to force the sale through specific performance.  

Toledo is already a dying city, and this added burden may be enough to force even more capital to flee from it.

It's like anything else nobody's forcing you to do something.

Otherwise they might force you to qualify your new loan as an investment property, which wont offer as good of rates, the cash to close is typically higher, and it's harder to qualify. 

It forces you to use commercial financing with larger down payments and shorter adjustable rate terms.If you don't have a partner, I would just keep in my personal name and maintain adequate insurance to cover the liability. 

I'm searching for C/C+ towns.