I don't see this being too big of an issue, baring some major catastrophe.

In the event of a catastrophic loss he is the one with by far the most to lose.

If something catastrophic happened to the building itself or common areas you would be SOL with your unit.Someone would need to purchase the whole property and complete the condo process so that there is money collected by all the units to maintain the building and common areas for this to really be viable in my opinion.

If the catastrophic happened, what's stopping the group from liquidating everything and closing up shop?

That's just kinda how it goes.The question is not - "Will jacking the house up damage the rest of the house"... the question is, "Will the damage be so catastrophic that repairs will be impossible or too expensive to consider"The fact that your engineer says you need 39 new beams is pretty concerning.

It doesn't have to be a fire, it can be any incidents or major catastrophe that render the house uninhabitable and assuming that it is not the tenant's fault.

As for flippers, over-leveraging can be catastrophic just like leveraged trading in the stock market. 

My company has a general purpose, national company... and like Bryan we experienced a catastrophic loss.

The complex has insurance on things such as the roof and exterior and structure (in case of catastrophe).

With that said, while I'm not looking to get sued, between having the appropriate policies and legal advice, I think we can get through this first purchase without any catastrophes.