Worst case, in 10 years, you definitely wouldn't be looked at as a new investor so that will help you quite a bit as well. 

@Tom Gimer  there was a big case in SF 20 to 30 years ago.. ( no rarely does an improved property in CA get all the way to tax sale its quite rare) BAre land yes thousands but not houses.Anyway little ole minority lady loses her 1 mil dollar SF row house for less than 10k.. in that case the county supervisors over turned it.. just like Oregon would do.but you have that one in SF right now were someone for 900. bucks bought the right of way to a Pacific Heights development..

There is even a comment on profit is made on rehab which is not always the case, in fact, rehab (especially for non established investors - local and OOS - - even experienced investments groups like ourselves) the rehab is where profit is lost almost each and every time. 

Be lucky you have those people in place, but don't expect that to be the case in the future unless you have 1) a product that can't be beat, or 2) a price that can't be beat to encourage your tenants to stay. 

If someone sued you and wins then yes your leveraged asset is vulnerable in either case. In

(unless of course your entity has credit history/worthiness in which case the loan would be determined on those levels)Case in point from a person in the lending business:You need to do a personal guarantee on the loan, then move it in.

Case in point, the investor in FL with the high taxes and insurance said they needed a 70% rule.

.`(2) EXCLUSION FOR VIOLATIONS- The Board shall prohibit the Secretary from paying insurance benefits to a mortgagee who violates the representations and warranties, as established under paragraph (1), or in any case in which a mortgagor fails to make the first payment on a refinanced eligible mortgage.`(3) OTHER AUTHORITY- The Board may establish such other standards or policies as necessary to protect against adverse selection, including requiring loans identified by the Secretary as higher risk loans to demonstrate payment performance for a reasonable period of time prior to being insured under the program.

Case in point - I have two friends who had purchased two houses on a block and had been passively working on tenanting the property for 6 months with no success.

Case in point, I have property under contract that should have closed two months ago.