Finally, not that it's a huge deal for you because its not yours, they perform very well.

The second is that there are a lot of soft costs that should be tracked, even if you are performing the function yourself for 'free': Financing cost, marketing, sales, overhead and of course profit.

For example if a rehabber is asking you for a zero-down loan and you have already done 10 deals in the past with him and he's always performed (even on the really gnarly rehabs), does asking for zero-down means he is going to quit and that the deal is bad?

How do other rental property owners perform background checks and what other checks do you perform?

If there's a second involved, it gets much messier, and much more likely they will have to spend money on legal fees to deal with a default.If the borrowor can't swing the deal with their own money and the money from the HML, they shouldn't be doing the deal.If this is someone you trust to perform, offer to partner with them.

That is why it is critical to have people where you want to purchase with great knowledge of the area top advise on what the opportunity looks like.Of course you need to see the property and perform due diligence but some sellers and listing brokers on the commercial side will not even put anything under contract until the outside investor has seen the area.

Great job on performing some additional due diligence Scott.

You can look at an area's average statistics and assume that's what your property will perform at.

Properties here you can hit for multifamily a 10 to 11 cap going in.If you do distress you can further your returns.It all depends on how much money you will have to play with after you sell your property and 1031 exchange it.There was an investor before that told me of a 1031 exchange where his funds were held by an intermediary waiting to exchange the funds into another property.The 1031 company filed BK and the funds have been tied up for years.So when putting with a 1031 you have to make sure the funds you will be exchanging are protected.The people I now just keep exchanging and refinancing out the equity.Then when you pass away your heirs inherit at a stepped up basis wiping out the deferred gains.Sometimes doing a 1031 the seller you are buying from will play hard ball as they know you have a certain timeline to perform to get the exclusion.It all comes down to where you feel comfortable investing (location) for the returns you will be getting.

If so, how is it performing today?