I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

Currently in a law suit trying to recover my money

I lent $225,000 of which $185,000 was for the purchase of the property and $40,000 is going toward renovations.As a lender I just want to get back my loan amount back (in this instance $225,000) if there is a total loss with the property.I have seen where a lender tells the insurance agent how much property insurance he/she wants based on a price per square foot calculation.On the other hand I have also seen where a lender tells the insurance agent that the amount of property insurance should be the loan amount in this instance $225,000.

If price goes down, I still have the paper loss whether I have paid it down or still have the mortgage.

In life we get caught off guard with Health issues, Death in the family, Loss of business or jobs (Unexpected pandemics!).

Demographically, very slow (sub 1%) population loss is fine, these things tend to rebound eventually.

There could be other factors that fit as well, missed payments, illness, job loss, vacant, poorly run rental.

@Chi Zhang I take it that you are trying to use the depreciation and expenses as a loss to offset W2 income? 

Often the "student" doesn't do his/her due diligence PRIOR to choosing a mentor / coach, resulting in a loss of money and little to show for it.

Have a property (new build) in North East SA, rented for a year & unable to rent for almost ~10 months now, selling in this market would incur > 100K loss as impossible to compete with builders.