My investment in the Safeguard originated note was $60,000, so my loss is approx. $44,000. 

Not enough information here to answer this question accurately.Is the home a total loss? 

I walked to the house and met a man who says he was cleaning out due to the loss of their mother in some few weeks back.The guy told me she is  left with 12 years mortgage on the property to pay the bank.

At this point I'm mentally prepared to take a loss and be done with it.

If your AGI exceeds $150K, passive loss limitations apply unless you qualify for Real Estate Professional Status (REPS).This post does not create a CPA-Client relationship.

Sharing leases, profit and loss sure but no inspection. 

Hey @Sidney Duquette so I am not a fan of buying properties that can't perform with the hopes that it will build equity to offset the losses.

@Roy Kinzer Rent control in NJ can be a tough pill to swallow and unfortunately has caused many of my deals to fall apart quickly once buyers/future landlords realize how strict the controls can be.

From 2nd Mortgages to 1st MortgagesWhen I started, PPR was buying primarily 2nd mortgages. 2nd mortgages is essentially loss mitigation (helping the borrower get back on track and stay in their home).

As the investor gains experience, they are not only able to more successfully foresee the “bumps” along the way, able to handle recessions, temporary negative cash flow, unforeseen capital expenditures without panicking, but will also recognize the opportunities necessary to turn a loss into a break even.