Many investors lost everything and went bankrupt betting on appreciation before the housing crisis.

I’m glad it works for you there ...but try that in a c- or d class neighborhood and you’d be bankrupt in a couple months  

Many wise prudent investors have gone bankrupt in real estate and lost everything .

The business model here is to a) not ask a lot of questions about what you're insuring, which allows you to b) have the cheapest insurance, followed by c) honor an unusually low percentage of claims , leading to d) eventually your ability to issue new policies suspended by the state [but people can renew existing policies] and e) make a crap ton of money in the process, followed by f) that carrier declares bankruptcy, but it's ok because g) you and your buddies with all that profit from the now-bankrupt firm go start a new insurance carrier, and of course h) rinse and repeat.

If you sell used cars, paying for a complete body & paint job on a $3000 car is going to bankrupt you in short order, whereas the guy who wants to have a nice car can put that into it and still be ahead vs. buying a new vehicle. 

@Colleen F.Both of these can be true: I don't believe that anyone should have their debts wiped away unless they are bankrupt, and people with no assets got hosed bad and alot of these people are the same folks who are having their college debt wiped.  

That company is now bankrupt.

What happens when the place gets gutted, materials are purchased and your contractor/borrower gets hit by a bus, or goes bankrupt from other projects, or God says this isn't going to fly?

Some long time property managers around here refuse to work with them because they don't account for fixes and vacancy, and some of them go bankrupt the moment the market slows down.

He couldn't do that, so went bankrupt.