Dealing with problematic tenants, constant maintenance issues, and the pressure from family and friends who don't seem to understand your vision can make it all feel like an uphill battle.

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.

The first rule of gambling is that no single loss can wipe you out.

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

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.

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.