After a week of intense study and some great interaction with this community I believe I am ready for the next step.

Having other options to get paid if plan A doesn't work out is good business planning!

You can usually get with creditors with the tenant on the phone and work out payments if you want to nail down the specifics.

Rent bumps are not as strong but you also have all expenses paid by the corporate tenant so that 2 to 3% per year bump is not offset by growing expenses and maintenance costs.Water goes up, taxes skyrocket, land or building has issues the corporate tenant eats all the costs and you still get a passive return.I do agree that for people with limited funds houses are a starting point because they have more time than anything else.The clients I deal with typically have a few hundred k to into the millions and they do not want intensive job or headache type investments.

I would go with the first group, perhaps putting them on a M2M or shorter than one year lease to see how they work out at first.I wouldn't take anything the second group tells you at face value without checking it out.

Yea i agree with you 100%, the only problem in San Diego is that the more affordable the houses are the more intense the competition is, through REO's and auctions that is.

How did it work out for you?

Sometimes short sales are not allowed as a workout option with commercial loans.The bank holding the defaulted note might finance this person at much ,much better terms than another bank looking at it as just another loan to fund.

It's not a home run, but if you live in one side for a few years, it will probably work out pretty good as long as the neighborhood doesn't deteriorate.

If the numbers work out as well as you think, it might not be impossible to find someone who will front the 20% down needed in exchange for 50% of the profit.