If you did not and it’s unsecured debt you could be out of luck on some or all of the money as depending on his situation unsecured creditors in a bk may receive pennies on the dollar depending on what he can afford and if converted to a ch 7 you would get wiped out.Even in 2nd position he could argue the property is underwater and wipe out your lien.

With $40k saved, you’re in a strong position to consider options like house hacking, BRRRRs, or partnering with others to maximize your investment.

I think 2017 was too early, but now there's a few projects that are making progress, I will list their twitter accounts:@RealTPlatform@CitaDAO_io@PropyIncpersonally most interested in RealT and CitaDAO - you can buy a fraction of the property on-chain, and earn income, and exit the position on-chain if you like. 

It’s all about positioning yourself for long-term gains, and with your current knowledge and tools, you’re in a great spot to make that happen!

Instead of extensive renovations, we focused on strategic market positioning to enhance the property's appeal.

Positive and negative forces will cancel each other out to some extent. 

****************************************************************************************************Here's my breakdown for an 8-unit property listed at $600k, but based on your analysis, it doesn’t seem to cash flow positively.

I have been through the BK route more than a few times in 40 years of HML ing.. and as Don states it can be just crazy what happens what the debtor will do what the BK trustee will do what the judge will do.. that all said if your position in the note is discounted enough probably still worth it. but in my mind to pay 90% and if there is not SIGNIFICANT upside I personally would not do it unless you have a repositioning play or something that no one else sees. 

With your income and plan to pay off student debt, you’re in a strong position.

if you're not in a strong financial position, it's probably more difficult to be confident.That's a great point.