The seller/developer declared bankruptcy. 

Instant added value, age in place, rental potential all very sellable, 3) you'd have to declare your intention with the city and probably have to give up your right to that spot, 4) yes and it will make a nice deduction as it will be used "exclusively" for your business so that will help with your taxes, air bnb and long term rental is totally allowed as long as you get the correct permits from the city for air bnb especially.

@Kristin DrumhellerThe owner is telling you that title insurance is not available and won’t be unless you obtain a court order declaring you as the owner.

I was going to say remember you may still owe 25% tax on the depreciation you declared, especially if you owned it for years.

Sounds like a great learning experience, as well as practice exercising that risk muscle. 

Then again prices have reached some astronomical levels over the last couple of years, making that potential correction percentage look like it'll flex some muscles.   

You can probably get a judgment, and if she doesn't pay and doesn't declare bankruptcy or similar, some places you can get a contempt of court judgment.

How would I be able to get a small claims court to declare a judgment or get a collection agency to collect?

What would you do if your borrower declares bankruptcy?

Hmmm...you could possibly borrow cash from the Airbnb but you'd have to declare that you plan on not living there as your primary residence because the product I have in mind is only for investment properties, not Primary Residences.