Unfortunately, human nature is such that if I do spend hours, days, months vetting a sponsor, and ultimately sign off on them, I will already be biased to accepting the next deal they offer, regardless of whether it is good or not.  

The responsible time to begin raising capital is once you’ve taken projects through full life cycles (hopefully some with success). 

You are talking spreadsheet language in the post that doesn't really correlate to real life unless you are very experienced and using this data based on your experience.

People sometimes make bad decisions in life and you have to decide whether it is forgivable or not.

Any recommendations for institutions that can extend a line of credit backed by a whole life policy?  

Edit: And taking 10-20% equity on a deal like this with an experienced investor might be completely worthwhile and life changing to be clear. 

Some people just don't have good mentors in there life, and/or need to learn through mistake.

It's one of those things that you just have to keep on keepin on because at the end of the day, it only takes one seller to change your life.

2-4 paid off properties in great areas with minimal headache is likely life changing for most people who don't overspend monthly. 

At the end of the day, that is life however to Stuart's point, you may want to consider investing in better areas where this does not occur normally if this is an unsettling occurance for you.