It’s a good idea to include penalties for erratic payment, but even then some may still push the limits.

Apparently, you can take unlimited deductions with a professional license as opposed to the 25k limit in a passive cashflow.

Agreed with a lot of what Don said, but will add my own 2 cents.I am actually thinking about trying to do something similar, by acting as general partner and taking on limited partner investors through a limited partnership.

See where I am going with this.Set limitations ,and expectations asap other wise you will be hearing this.

Thanks,Jesse Jesse, based on my experience in Cleveland, if you are buying at $50,000 all in for SFR,  you will get the rent that you quote for a limited amount of time if you can even get it, no magic, just like anywhere else, expect a high tenant turn-over, short term tenants, expect high turn-over cost.

Not convinced that it's really cheaper to convert one of these vs building new though especially given the inherent limitations and the appeal of the final product.  

My (limited) experience with appraisers is that most of their work is done before they see your property.  

Although I acknowledge it's getting tougher to get FHA loans under the price limits in areas you might want to move to in Oakland.

If I'm understanding you correctly the feasible scenario would be to get a hard money lender to lend you purchase price and then immediately cash out refi with a conventional at 75-80 (whatever the banks limits are).

They obviously have limiting beliefs and you do not want to associate with them.Remember, what people say is about them and what you hear is about you.