You are probably correct.  

To the other experienced investors out there am I analyzing this correctly?

From contribution to getting communications and distributions. 

Also consider your lifestyle and if you want to be traveling 3 days just to check to see if a water heater is installed correctly and your property manager is looking after your property.

@Chris Rendall couple comments,@Wayne Brooks is correct if it was a Homeowners policy now being transfer to an LLC and used as a rental. 

I think I should correct myself and say that builders are certainly not the only ones to reap profits from there. 

Overall, it sounds like this whole thing stemmed from a communication or integrity issue that occurred at the loan officer level.

There are a ton of qualified broker and lenders out there that can offer this product but be sure to receive the proper education when iyb comes to structuring the deal correctly.

Beyond that if I am understanding your post correctly, you are in a market where the settled price is 97.9% of the list price.

One thought if Scottsdale still owned the notes was, see if we can buy them at a discount and make a spread on re-selling them, but having seen that interview, you're probably correct that they had already sold them on anyways, keeping that spread themselves (which never got back to investors!