Picking up the SFRs at 50-60% of what similar good-condition houses are selling for in the area is a tremendous risk mitigant and offers an attractive alternative re-sale exit strategy, to generate cash (if desired) for your investing machine down the road a bit.

We mitigate some of the risks by managing the back office functions of the local licensed property manager by making sure our system tracks virtually everything which is available to the investor 24/7.

They do not seem to have a hard and fast rule and from what I hear it likely comes down to differences in particular BofA mitigators.

Application screening determines a level of risk, then you either accept the risk, deny the risk, or mitigate the risk.In this case, it's an established company that is going to pay their bills.

Is there a way to mitigate this by giving the PM company performance incentives for occupancy, NOI targets?

There are literally probably 1000 threads dealing with different ways to do it, how to mitigate the risk, whether to inform the lender or not ect ectAs with any investment type there are always risks, you just need to understand them.

Great advice @Haim Mamane Palman Any specific advice on how you contractually structure the deal with the GC to provide incentives and mitigate risk?

Our main concern is the risk to us and what we can do to mitigate that risk.

One risk to mitigate is that since you aren't the owner, you want to prevent further encumbrances (tax liens, mortgages, etc.) against the subject property during your option period that would inhibit your ability and/or the owners ability to transfer clean title when you take ownership.

As others have mentioned IF you have a close relationship with a broker, that could mitigate that somewhat, but its unlikely that a broker is going to want to spend hours and hours lurking around the mls just to fish for info for you, unless maybe you're someone that's buying and selling TONS of properties and thus getting them tons of commissions.