@Cody L. appears to have done very well investing in Houston but I point out that RE investors in san Diego have also produced outstanding ROI. 

Since they are beyond their lease and not paying rent I will have to have them served with a Notice to Quit?

@Nicholas L.

When the down payment is 50k, this is a proportionally significant number.From a ROI perspective, I would like to bundle all these "startup costs" along with my down payment and closing costs into a lump sum (call it "acquisition cost") so that I can compute my cash on cash ROI.But this is in conflict with how the IRS will treat them -- as ordinary expenses.Besides not having a good picture of how my P&L is actually doing, I would like future lenders to see the higher (actual) profit, not a poor first year because of the startup costs.

@Pat L. the inspection report would only be accessible by the previous buyer who didn’t go through with the property for various reasons.

What I have found that should work for you is to find an seasoned investor, and of course shop around for the seasoned investor because not all investment styles or strategies will fit yours, and use their experience to  serve your growth.

Looks like a CFD does serve purpose. 

If I am him though I wouldnt take the $50, at which point you have to live with him being late or you have to file eviction on the 8th (after serving proper notice to him on the 1st) for non-payment of rent, as mentioned above. 

Hi All,I'm considering lending money to a turn-key company in MO for an APR of 10% paid monthly with all funds to be returned after 6 months with possibility to renew.They've given me a promissory note which contains the following term:      "This loan shall serve as a second lien to the property located at ------------"They reported to me that they have more than enough equity to cover both liens.Is this term in the promissory note enough to protect me in the case of default?  

  $10k would probably get you around $40k in financing.My team can serve as a source of deals in the Houston.