Don't skip this paragraph, however, because you might be surprised by what is considered a securities transaction and it's important that you know what it is if you want to do it and just as important if you want to avoid it.Any time you accept money to invest from another person, and the successful outcome of that investment is tied to the performance of another person (YOU), the transaction is the sale of a security. 

Most people (of course not all) look for performing notes to be clean cash flow.

So they must use some other attributes to perform the match beyond just seeing that the names match; especially with commons last names.  

I would buy the item with the tenants imput and also either perform the work myself at my rate or hire a contractor of my choosing to perform the work and then have the tenant reimburse me for the expense.

However, this got me thinking about when is there too much due diligence you can perform?

My plan was to buy underperforming properties and make them perform. 

The company track record, service experience, & portfolio performance are the paramount pieces to your long term success.

They should have performed a plumbing air pressure test which will give you a little insight on if there are leaks in the system.

I was wondering if anyone could tell me if I buy a 2nd position non performing note that was a charged off loan, do I need to have a collection license to enforce collecting or foreclosure?

You tied up someone's home in a contract, without the ability to perform.