An investment with an experienced sponsor can mitigate some risks because you are participating in a larger acquisition than you might be able or willing to do on your own (which gives economies of scale), and you get to leverage the sponsor’s experience, judgement, track record, network and deal flow.But it also adds risks by adding an additional component not present in direct real estate investing:  the investment sponsor.

I believe I have a pretty good idea of what I need to do and ways I could mitigate some of the risk.

If you can mitigate your losses by selling in the short term it may be the best option, particularly if you are speculating on appreciation or continued rent increases to turn a profit.

Will mitigate your risk and exponentially increase your RE knowledge growth.

Things can go wrong with high-end properties too, but it's all about risk mitigation.

The landlord also has a responsibility to do their best to find another room mate to mitigate the remaining individual/s's loss. 

On one of my California properties.. turns out we have some pretty valuable Tiger salamander habitatdepending on the study we do... mitigation is between 165k to 195k per acre with 1 to 1 and up to 3 to 1 offsets.so 165k and acre to potential of just under 600k per acre to mitigate these guys.. cash to the govmit.and this is just one thing that needs to be addressed... usually the whole property is not affected but a neighbors property is 10 acres and 1 acre is affected depends on 1 to 1 or 3 to 1...now our property is worth 1 million an acre as development ground.  

Rising interest rates will also put pressure on cap rates.Most prudent investors are adding value and purchasing properties that cash flow in good locations to mitigate risk. 

I didn't inquire into the details, but it would be my guess (given that particular state) that the owner was also sued.In my case, one of the reasons I have a property manager is risk mitigation (beyond wanting nothing to do with the day to day hand holding of tenants).

There are separate ways to mitigate risk with development and that is a topic for another post.