I just mean to say that I don't think there is anything wrong with their business plan, their operational expertise, and so on, so unless something melts the economy down, it seems as though Brian integrity of the operators is the only remaining variable. 

My client plan is to demolish and do new construction within 1 year.

When we create our business plan, we also include our exit plan.We'll only proceed if we can clean this up, acquire new tenants at higher rents so we can increase our NOI, which in turn should reflect our cap rate and profits.Since this asset class is new to us we will tread cautiously.Scheduled to preview tomorrow. 

In my state the standard contract used by realtors addresses this issue by allowing the agent to check a box specifically to limit the seller to keeping the EMD as opposed to going after "liquidated damages" like that.

Rent control laws are market specific.

A cost segregation study is a strategic tax planning tool that separates the assets that have a shorter useful life and can be depreciated over 5, 7 and 15 years from the residential rental property or nonresidential real property that are depreciated over 27.5 and 39 years, respectively.

I would only sign something like that for specific properties unless you know you're getting good volume from a single agent.

He plans on having 2 roommates. 

The main criteria is consistency with adopted plans.

I call this dumb debt: Quick note; the deferred sales trust can save a failed 1031 exchange( cost zero to have this option, nor does it take any of the identification property positions) (It's wise to always have a back up plan)More on Dumb debt.