So, you want to watch tenant credit scores, see the default chart below: FICO Score Pct of Population Default Probability 800 or more 13.00% 1.00% 750-799 27.00% 1.00% 700-749 18.00% 4.40% 650-699 15.00% 8.90% 600-649 12.00% 15.80% 550-599 8.00% 22.50% 500-549 5.00% 28.40% Less than 499 2.00% 41.00% PROPERTY VALUES: What are buyers willing to pay for a property? 

They kept telling me the deal was solid and then defaulted after the closing date and post dated the denial letter. 

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

The thing about this bank, is that they seem like they are ready to s*** their pants at any moment, fearing I am going to default on them.

Having tenants default?

With two UCC filings from two lenders (there could be more), they're borrowing money against their accounts receivable at a high interest rate, and he believes it's very likely they will default.

we invest in defaulted debt and have looked at it in the past.

I've seen people tell bald-faced lies about so many things... to the point where my default mode is almost always to want to verify any and everything said around me. 

Tenants in lower Classes will have lower credit scores, which means higher chance of defaulting on their lease payments.

Once these type investments develop a history, I can see a market similar to peer to peer lending where default rates become standardized and known.