We are trying to decide if this is strictly an exercise in how much liquid funds we want to have available, along with a comparison of ROI to any other potential investment, or are we missing another consideration.

I want to give this person a chance.The cons I see are: this individual has no savings, the individual's mother has an open court case that is being settled (she is not at fault) due to a car accident and ongoing medicals bills, they have one past eviction due to the accident preventing them from working for three months(they were asked to leave).

Medical Payments: Provides coverage for an injury suffered on the premises.

@Thomas HatleyHi Thomas,Many of these people are on government paid for medication and can be functional--perhaps she is one of them.Maybe go knock on the door and tell her she has to leave in 2 weeks (or start paying you rent) because reason X (with sellers permission) and see what happens.If she pays (or has been paying in cash secretly (move her to on the record payments)--you might have a good long term tenant.

Unless you are an institutional investor, calling banks and offering to take properties off their hands would be an exercise in futility.

If they have a pile of medical bill collections but no assets, who cares if the tenant doesn't pay them, the debtor won't be able to touch them. 

1) Do a better job paying attention to heatlh - exercise, eating, enough down time, and paying more attention to personal relationships (family).2) Get a couple simple but boring project down at my day job business that I have been putting on the back burner 'because I can do them some day'.3) Get signed contracts on a couple deals I am working on : a group of a 4 plex and two duplexes that I am working on buying in my SOLO401K with a low down payment seller finances non-recourse loan!

While the intention was always to be an LLC.The lender can exercise the "due on sale" clause if the name(s) of the buyer are not the same name(s) as the members identified as the owners of the LLC.

If you go through the exercise in Excel, you'll find that Return ON Capital is usually vastly superior to the Sponsor, and the IRR to the LPs isn't much lower--at least not enough to flag the deal. 

Many years ago after divorce, legal fees and medical bills had in over my head; a wholesaler bought my house and saved my life.