They even added a small “welcome basket” with loccal treats, and guests loved the personal touch.. it became one of their most mentioned features in reviews!

You could theoretically structure a deal where you are cash flowing negative, but have an overall positive ROI.

Also consider all lenders will require to review your insurance when underwriting a loan and it's likely a violation of your existing loan documents to let the properties go uninsured even if they didn't require insurance escrows. 

In our area, the housing authority does annual inspections to (mostly making sure the landlord is keeping up the units) review the tenant and the landlord. 

However, one of the other REITs I invested in quadrupled in price, and as a whole I’m $150,000 positive.  

We review yearly with our CPA who files the necessary forms.By law, IRAs require a custodian.

But it sounds like they are just positioning themselves in the middle of your 'deal gone bad' to make some money for themselves.  

There are a few programs that can do second position financing but typically underwritten based on your personal income.

Turn this around into a positive feel for the tenants. 

Also, if you were in our position, what questions should we be asking the lenders to make sure it is a good fit?