Keep learning and assessing your financial position as you grow.Good luck!

Hopefully it balances out and ends up net positive. 

Strategic Purchase: Acquired a discounted double lot below market value with a $17k impact fee credit.Custom Design: Built a 6-bed, 5-bath home tailored for co-living or multi-gen use, maximizing tenant appeal.Efficient Management: Managed construction, and self-managed operations to minimize costs.Premium Marketing: Furnished the property and used multiple platforms to attract quality tenants quickly, achieving full occupancy.What was the outcome?

The risk that the borrower can default, the risk that you will have to foreclose, the risk that you will have to take over payments on the 1st TD if you are in 2nd position, the risk that you have to invest $$ into the property to sell it... 

Would anybody in similar position be interested in starting a partnership/s to go in on a loan together?

Leveraging equity and planning your next move with strategic financing is an excellent way to build your portfolio.

It might be one of those positive sunk costs to increase the value when financing.

The loan shows it is SUPPOSED to be issued only if its in 1st lien position, but if a mistake was made in 2005 it would not be in 1st lien position.

If you have deep pockets, I think Austin will eventually reward you, but if you are a newbie in real estate looking to cash flow positive day one or shortly thereafter, Austin is probably not your best bet in TEXAS.  

Forcing appreciation is possible, but you must be very strategic about how you renovate.