Did I just get scammed or has that happened to anyone else?

What is you exposure if the deal you raised money for is a scam or the person messes the deal up royally and loses the equity all their money?

Total scam........ they are often expensive, don't totally cover the items, the companies they use to "fix" claims are often crap and they will band aid the issue until the end of time......The single benefit is if you are OOS, you call them and they handle the claim, so you don't have to find your own repair people etc.....so its ease of use...... but you often have to manage the insurance company as they jerk you around, stall and band aid the actual issue.....Had one when I bought a rental in TX and then continued it when the initial expired..... regretted it to this day.I'll take one as part of the deal when I buy.... but wont keep paying for it myself.Better off building a network of repair companies you trust

As a rule of thumb, I like to allocate about $250 per month to this ($3000 per year), knowing that most months I do not experience the any repairs, but once every now and then I have to devote a few thousand to a renovation or upgrade. 

Maybe some spectacular failures on the coasts will help people to see it for what it really is: a sham and a scam.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Google Clayton Morris scam and/or Morris Invest scam for a cautionary tale of what not to do when buying turnkey real estateUnderstand you can not eliminate all risk, only mitigate it.

I've found that when using these services as the side offering something, I loose about 5% of gross profits to scams on average.

It sounds like you've devoted a fair amount of time to educating yourself (kudos on that, by the way - educating yourself will be the best investment you could make).

The local REIA seems like scam in Austin.

It makes the company look like a scam.