I am looking to partner funds with friends and family in order to lend to a contractor partner, either as straight debt financing for acquistion and repair costs, or a combination of debt and equity partners, participating in profits after resale.  

The seller promptly fired back and claimed the following:I had breached the contract by “acting in bad faith” when I contacted Pizza Hut without his permission. 

Make sure the fee in the lease is enough to repair all the carpets. 

If you found it to be defective... not bonded, grout popping etc... thats a repair request. 

Our relationship improved and he started to do chores around the building including gardening, lawnmowing, minor repairs all saving me money. 

Also, what are you factoring in for maintenance/repairs and cap ex?

they sound like they may need a lot of repairs if they are appraising for $40k in an area that sells for $70.

They may keep a few hundred in your name for small repairs.

What type of repairs does the home need and how much are the repairs (breakdown the amounts for an easier decision process).Here is what you could potentially entertain if the numbers work: take the house "subject-to" and do a stack and wrap.

Such as vacancy (BP says he estimates 5% generally based on his experience but I lack that experience as I'm a first time rental property owner), Repairs/ CapEx, and rehab budget.