Calculated, but a risk. I

Tenants as contractors is a very risky business practice.

I could've rented the SFR to a maximum of "three unrelated people" per zoning and probably grossed $900 on $30k of renovations and 250 hours the work.Modern building codes and zoning ordinances make this an incredibly difficult proposition.         

Of course, measuring that risk is the delicate task of a great investor.Finally, if you are worried about your CoC diminishing over time, you can always refi the property to return the leverage and restore the return. 

Risk is my biggest concern which i know will always be there but to go about this in the safest way is my top priority. 

When forced to take on a high risk tenant that places all tenants of that landlord at risk. I

I agree with you, but I feel more comfortable doing my flips in cash because of their risky nature.

If you goal is to buy several places you need to be thinking out at least one property.Of course, leveraging yourself to this degree is also very risky.  

Now don't go putting every contingency in the business, but put enough to make you comfortable your risk is sufficiently mitigated.

Why do people decide on the FHA Loans when it's so risky?