For that reason alone, I vote for cities in the Red states.

I am not sure how those work and wanted to see what the potential options are.The owner had offered the property for sale with a quitclaim deed (red flag for me) at a hugely discounted price, but obviously the IRS lien falls on me in this scenario. 

No dings on the background check, respectable jobs in the community, and no red flags during the apartment showing.

Every now and again I see one advertised, but the LTVs are low (50-60%) the interest rates are high (above 6%) and the red tape is horrendous.

He is looking to purchase personally, no use of LLC or business entity and it seems a lot of lenders are immediately attempting to direct him to residential mortgages (with much more red tape) and push the construction to permanent format.Would love any insight or possible connectionsThank you!

What are some red flags or good questions to ask to find the right fit?  

If you can make these 2-bed units (which I question), my math puts you at least $300/month in the red.

I knew this offer would only have me break even and actually later I discovered I would be a little in the red. 

The hard money loan would cost $6500 a month and that would put me in the red quite a bit.

Surprisingly, most that know they won't pass either object (red flag) or don't even apply, saving me time.