Meanwhile, in the 4 years in limbo massive redevelopment was occurring in the area, and we were offered an amount equal to our investment plus a reasonable profit by a developer.   

They're good to have open access to capital/cash/equity to a property ahead of time so you can execute a deal or purchase when the time comes on a split second decision (versus having to apply to a loan at that time which might take 20-45 days to get approved/closed/etc plus by that time you dont know what your future income/credit/assets will be like in order to qualify anyway).The second use is sleep at night factor and having a reserve of capital in the event an emergency event occurs in life.For these two reasons is why I use lines of credit.

The equivalent tools to Priceline have been in place for the transition you describe to have occurred 20 years ago.

Here’s what I do with my rentals:I either have tenants split the utility bills or include a clause in the lease that states if the gas or water bill exceeds a specific amount ($X), the tenant will be responsible for the overage, provided there are no leaks or other infrastructure issues contributing to the high usage.To determine this $X amount:Water: I take the highest water bill I’ve had over the past year (excluding periods where leaks occurred) and add about $15 to account for small fluctuations or potential increases.Gas: For gas, I calculate the median bill during the winter (when usage is highest) and the median bill in the summer (when usage is typically lowest).

One, the investment may have been one that worked well but a mostly unforeseen occurance happened, to either the economy in general or to the subject investment in particular.  

There is no demand at-all for these properties.So in a worst case scenario as you state, the amount of money to be lost may be smaller, but it has a much higher probability of occurring than say a California property not appreciating over time.  

I’m aware of loss harvesting when it comes to stocks, bonds, etf’s, etc. but how can this occur with real estate?

To date, they have not fought the fraud charges or I would be testifying, that may still occur. 

Capex- how much capex is needed, and what happens if only xx% occurs?

For example, you may reduce the maintenance and capex to 5% and then discover turnover occurs more often than you had planned.