If s/he thinks you can go on TV, go on TV.Figure out what (if anything) could be dome to mitigate it in the future.

At the end of the day it's still a liability that will lose you money over the long term, intelligently financing it is just a means to mitigate losses.You've actually run your numbers.

We were absolutely devastated.Where we stand now: we immediately called Nationwide (our homeowners insurance) to file a claim, got a mitigation company to come out and they’ve basically ripped out the house down to studs on the first floor.

There is a wetlands issue that would need to be mitigated; however, there are now two parcels listed that the investor would have and could build on both of the parcels.

You could possibly mitigate that risk by reaching out to the HUD manager (contact info is in the HUD disclosure forms) and talking to them in advance about their willingness to allow assignments of the contract.So, yes you can, but you really need to know what you're doing, and I wouldn't recommend it, if you don't have some cash reserves. 

Identify the probability of a risk (such as vacancy) occurring and the mitigation steps required (cash reserves) to cover yourself.  

The deals that read well on paper and are turn key usually cost a little more because vacancies are lower etc...Looking to wholesale or flip you can mitigate alot of your risk by buying right.

@Gururaj Iyer I prefer multi family for short term rentals to mitigate risk and to ensure they cash flow no matter what.

My reason for this type of deal was to gain additional flipping/rehabbing experience while mitigating the risk with it being a property that we were going to live in.How did you find this deal and how did you negotiate it?

Deal risk can be mitigated by choosing a sponsor who has a track record of good deals, and can be further mitigated by investing in a fund with a sponsor with a good track record.