Companies like to do this in case a property or location is not performing they can bankrupt the remote entity and walk away.

For reference, here is my current default log with POL -- as indicated some of these have been non-performing for many months/years but there has been almost zero movement/action by the POL "asset management" team at resolving.

They are performing very well, at 10%-15% ROI.

Indexing is great if your committed to the stock market or are OK deferring your RE plans, if the market drops.RE can beat the stock market because the RE investor can put in the time and effort to influence the investment outcome - which can't be done in the stock market.

If they don't perform as they should, it's...their last, that's it.

There is often the zoning itself that needs to be changed and also site plan approval.The multifamily project close by might have already performed due diligence in the area and have the reports they need to make a decision.

I used a local California property management company to perform the lease signing and background checks on a tenant we found ourselves for my newly vacant SFH. 

You wrote about a typical scenario where you go in and perform interior rehab...carpets, appliances, hardware packages and provide receipts to a cost segregation firm.  

Be sure your numbers are calculated well, and base the anticipated value off of performance CAP rate, and you should be fine.

However, oftentimes this is difficult to do in our market, so the option fee that they pay usually helps it so that we are able to get the majority of our money out of the property.The rest of the money we have left in the property we create 2nd position performing notes that perform at 11-12% APR that we sell to passive investors.