To defend a charge of acting as an unlicensed broker, you have to be able to prove you had an active role in management other than raising money, and that’s what you got compensated for.

A healthy dose of skepticism is good, but usually they want you to have the best experience possible.

Supposedly the second lien holder is a credit card debt collector, they were listed as the defendant in the foreclosure case.

(We settled anyways because the settlement was cheaper than what my attorney bills would have been to defend against this absurd suit, so I didn't test the true strength of the LLC)

This would include architectural fees, new equipment, cost of protecting or defending your title to the property, or building improvements.

Cash-flow is for "keeping the lights on" as in covering operational expenses to defend against any need for additional capital investment. 

I think using a value outside of that is going to be tough to defend if you are doing a cost seg, which already attracts quite a few audits.  

Also, the crazy thing is this broker is still believing their BS, and he and his sister are defending them.

In fact it may actually complicate litigation in the event a claim were to arise while adding additional insurance expenses to your real estate operation.To explain why this is the case I’m going to ask one very simple question: In the event a tenant dispute, premises liability, or any other claim were to arise, what prevents the Plaintiff’s attorney from merely listing your wife who it seems is the property deed holder in your fact pattern as a Defendant?

What I do see is that a strong screening process improves your chances of getting a responsible resident.