Also, the historical data tells me that 3 years of underperformance means that future performance must improve substantially in order to meet the IRR goal for the investment.

We have never had a tenant that was able to produce any factual data that supports their concerns. 

For example, if you are in a secured position and invest $25k and can get 10% per year at $2500 or you can get 15% unsecured which is $3750, are people willing to risk the extra $1,250 a year where you could lose all of your $25,000 investment compared to being secured where chance of losing it all I would view as astronomically lower?

"Separation" may not be possible, but I'd like to think of an LLC as an "extra layer" of protection, although you're not completely isolated from risk... just makes it harder for others.

So you as an owner, would you be willing to ask for less to have your property rented quicker and "lose" the extra $1200 or so per year or would you rather lose that $1200 per month because your property is sitting vacant.In regards to demand, Cleveland is one of the top Sec8 markets out there. 

Also, never listen to the sales people on their saving projection, I've yet see someone who does a good job of data analytics to truly project it correctly.

You should really analyze your options, as data should make your decision easier:)How much have you been making on the STR?

.: You might be able to raise extra capital to support this project by listing the property for fractional ownership on lofty.ai.

I would throw in a few more out there for you like Listing optimization: Rankbreeze and Intellihost, Data Companies: AirDNA, Mashvisor, etc., and guest verification platforms like Superhog or Chekin.

Also its my understanding that if he bought the note for lets say 10k  and it had an unpaid balance of say 25k  all arrears and cost including on the opening bid and if it had sold 3P at the sale for say  40k  Bob would get his 25k .. which would give him a 15k profit on the deal and the extra 15k would go to next in line if their were leins or the trustor/owner who lost it.