You can use fancy words such as 'using leverage to enhance returns' etc. all day long, but the fact remains: if as a client I loose 50% of my premiums to commissions and fees I don't care what kind of leverage I gain as a result, it would practically be impossible to recover my losses. 

In Illinois for example, you can recover attorney's fees, but you only have 1 year to file a claim from the date of closing/possession, whichever is earlier. 

from what I have heard, rents there have not fallen as they have in Calgarywhat would happen to your cash flow calculations if rents dropped 30%I always calculate what is the worst situation and if I can sit it out till it recovers

Generally, I've seen that if you do a refinance within 90 days to recover the cash, it should be fine.  

I've looked around a bit and talked to close to 20 agents and I've found that most cities have recovered from 2008.

In 2009 they both were down around $200k from the peak, but the Glendale home went from $750k down to $550k and the Lancaster home went from $300k to $100k ... today, they have both recovered $100k ... the short term appreciation on the Lancaster home from 2009-2016 was better (percentage wise) than Glendale ...

In a a state like NY it may take months and you could end up with a tenant not paying you for months and having a hard time even recovering any money from the tenant after eviction.

In either case the objective would be to recover some or all of the original investment capital and bump the ROI up through the roof.It should be safe assume that this is a cash flow deal you're talking about.

- still recovering from shock:) - who does that?!

Investor could potentially be bought out with short sale for the right price or they could squash deal if they want to hold and recover rents.