I can say this because I made this mistake and bought several dozen homes and almost went bankrupt.

Going big too fast means going bankrupt.  

You'd go bankrupt if you were significantly below that, and wouldn't have any business if above. .8% to 1% to rate sounds suspiciously like the typical rate hit for investment property v owner occ, or SFR v 2-4 unit.

Or it could end up bankrupting some lenders.

We've been bankrupt on, burned, etc and even ones that do a good job for one or two, eventually drop the ball and are fired.

I moved to Cleveland in the early 80s and the city went bankrupt.

I have long said that if I had a financial calamity (jobless, bankrupt, etc.)

I heard another investor joke once that if you purchase too many "great deals" that have negative cash flows you'll make yourself bankrupt. 

So yes, they got the property but it was half finished or completely gutted, they couldn't find anyone to work on it, and much of what had been done hadn't been permitted so they found the properties that they received as security pretty much useless or requiring so much money to finish that it caused them to go bankrupt.   

Investing is not a smooth road and when the bumps hit the last thing you want is bad debt hanging over your head that can, and often will, bankrupt investors.