I think that there is definitely enough fat in this deal to make it work even if mistakes are made.

I also would have the most incentive on performance with the current tenants if the tenants are worth keeping.You do not want the property manager motivated to turn units for fat checks and make almost nothing off keeping a good tenant.

If you can garnish wages, then it is worth it, If they are on a government program, you probably can't collect, but you may be able to effect their entitlement check by forgiving the debt and sending them a big fat 1099!

The insulation below the house between the frame rails is looking really similar to a whales belly after day 6 of being beached.

There are risk of course, the project could go belly up.

Wrong thinking, you need to know how the bond was created, is it valid, is it in compliance, is the issuer credit worthy, what are their earnings, if they went belly up, what assets are there to pay obligations?

I saw many investors go belly up - some going as far as to ask appraisers to fudge a value so they could refi out of hard money.  

I believe the answer would be a big fat NO.  

I've known at least 2 of my friends who lost everything and went belly up because of banks calling in their loans.You have to think more creatively and rid your business of bank participation.

I deal with large housing developers on a regular basis, most of whom use 8 figure loans or more from the banks to do their projects, and none of them went belly-up during the last downturn.