You let it slide, waive the late fee, and she pays by the 10th.

So we need 3 maintenance incidents per week, personally handled by your wife.

The first alone in your example is at a 94% LTV Loan To Value ($375,000 1st divided by $400,000 value) and the wrap mortgage is underwater at 101% LTV ($405,000 divided by $400,000 value). 

Here is the Collin Hays method of buying the property at what you want to pay:Don’t ask the seller what their best offer is.

Buy your flips with soft created Paper secured by a flip you’d like to keep.  

Quote from @Brian Dela Cruz: @John ChapmanTypically, this would be treated as a sale, unless you reinvested the insurance proceeds into another rental property within two years (by either rebuilding or replacing), you can defer the tax under IRC Section 1033. 

I was curious, so I looked at 20 years of Zillow data.Growing up in Los Angeles, I always believed a saying that investors here seem to repeat: blue states appreciate more than red thanks to things like zoning restrictions and certain democratic policies (which is an entirely different topic I won't be delving on here).For anyone that didn't know, here is a map of each state's electoral voting history (for the previous 5 elections):Here is a heat map of 10-year price growth by state:At first glance, it appears the majority of states with the most growth were the "pandemic boom states" like Idaho, Nevada, Tennessee, Georgia, Utah, and Florida.

I'd start by giving all residents the required notice (usually 24 hours) and go inspect the units as quickly as you can. 

By creating a process, you can prevent these issues from taking place and save yourself a lot of time, trouble, and money.

I negotiated by being honest and transparent about every step in the process.