We've been communicating quarterly on the property status, but a simple search on Zillow made me think he's lying to me.

Although I am not sure how to enforce this one, there should be active, on-going communication from the the borrower to the lender .... as one would expect from a GP/Operator to the LPs in a private equity syndication. 

They go over a lot of the fundamentals that I completely agree on as a high skill operator in this space.  

It also makes it harder for other operators down the road--- not your main concern but we all impact each other.What about you and your wife live in the garage unit, and rent out the house for a lot more, at least until all this permitting is figured out.

There are "turn key section 8" operators in Alabama that market to do all of the due diligence for you and you never even have to see the properties! 

READ IT AND KNOW IT.We have a fairly simple process at all our properties. 

If looking to scale flips and create systems around it to minimize your time and involvement, I'd highly recommend putting a team in place that can handle the day to day operations. 

Quote from @Sarah Rhee: I have a real simple rule for investing: never sell an investment unless you can move the money to a better-performing asset, or if the sale will move you closer to your goal.Your situation doesn't meet my rules.

they will say you can operate a parking lot there.. plus who is going to spend the thousands upon thousands litigating this with the city ??? 

Similarly, using services like insurance back office support can streamline operations.