Yes, you lose some cash flow with one unit sitting vacant, but that should be built into your vacancy rate.

Point of Sale inspection) but also on the tax side (assuming the property is in an Entity), do not get to use the un-depreciated value or if there are any income loses to shield any capital gains.Do I have this about right or are there other important considerations.Oren

Playing games and fun generally relate to situations where there aren't severe consequences to losing.

All that makes the property less desirable for a buyer buying your property when you eventually sell off.Developers typically have maybe a 9 cap or so in it and sell for a 6 cap and lose maybe 100 basis points to real estate commissions, short term capital gains, etc. so might profit 200 basis points.

This is my first potential deal and it’s perfect, I don’t want to lose it, but I also don’t want to get it and not know what to do with it.

For reasons cited above, renting out an illegal (without city approval) unit in the basement with physical limitations, such as poor fire egress, is a fast way to the poor house, when you lose the property to fire, or the jail, if someone is injured or dies. 

@Jeffrey McKee law students are harder than lawyers—most lawyers realize getting to court is a losing game :)One thing that should help guide you going forward.

While I never bought when serving, I can assure you, managing a single property from distance should not be a deal breaker.As long as you are careful about who you rent to, and as long as you work with a real estate agent who is willing to screen tenants or a property manager, the number of tasks that require you to be on sight for a remote rental are few and far between.In fact, everything can be done remotely, and you'll want to ensure that you have a network of contractors you can call if the property needs work at any point.

They explained that if something happened at one property, a separate llc for each property protects you from losing your portfolio.

The former loses money when the deal doesn't work out, the latter still gets paid.