Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Partner Driven fully funded the transaction, covering the $17,000 purchase price.

Second Lien Position – A first lien position is safer, but $110K may not always cover the full loan amount for a flip.

Quote from @Scott Mac: It might be the investing environment.Right now we have a different interest rate picture then we had a few years ago.

My broker could not find any other carrier to cover a rental condo. 

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

The best option would likely be a construction loan, which can cover both the purchase of the land and the build.

Your homeowner policy may cover minor repair work but probably not a large construction project. 

The time saved on seeing that bigger picture is worth it to me.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.