I'm from Oakland and don't see it as dangerous as many people on here are making it seem.Other than Deep East Oakland and pockets of West and North,Oakland is pretty safe.The rougher areas are actually easy to avoid.Other than the obvious and expensive areas listed, the Laurel area,Upper Laurel,Dimond,and Glenview are nice and more affordable.The Grass Valley and Sequoyah Heights areas have a rural feel and very safe.

It is dangerous, has tons of really rough tenants, rough areas, ect.

@Julie Brandenberger mentioned 'draws', meaning the portion of $ the 'bank' advances at a time - usually about a third I think - they'll want to know what things you're going to do in what order and how much it will cost - another reason you'll need to know it before you start.You mentioned that you'd be focusing on properties needing cosmetic work primarily - it's a bit of a slippery slope - you need to balance between finding a property that isn't too complicated for your first flip but the danger there is that you're going to have some competition in that realm from both homeowners and other flippers - and sometimes the value that you add can easily be eaten up by holding fees, realtor costs, etc and you end up having worked for $1/hr.

But unless it is smoke, fire or explosion, tenant damage to the rented residence will not be covered.

The danger I see in your current structure is the small chance that the IRS comes in and re characterizes the sale of a rental property from capital gain to ordinary income.

Moreover, a DST can be used to rescue a 1031 Exchange that is in danger of failing.

I see it could be profitable but I also see it could be very dangerous to purchase one of these properties, the research I have been doing it is hard to get a set answer to important questions and they need to be cleared up before moving forward and bidding

There are ton of things you are missing in all of this- risk of extremely low-paying tenants, risk of extremely cheap properties (trust me, even a SFR in LA at $80-100k is beyond risky and most definitely an MFR (especially one that is permitted as 2 units but 4 are being rented out), due diligence to find the actual condition of a property (thinking something only needs paint is dangerous), etc. 

This is very dangerous ground.

I am wondering what are dangers?