My client bought a 22 unit building and used this strategy and walked out of closing with a check for $800k to perform the rest of the renovations, paid himself back his already expended rehab costs and his entire down payment.  

Some areas still offer strong appreciation potential along with steady cash flow, and when working with trusted lenders, you can find competitive rates in places like Memphis, Little Rock, and Oklahoma City, which tend to perform well on both fronts.

If this fails, then perform a land trust strategy.

There is certainly a strong correlation to credit score and tenant performance.

Statistically, I would bet that many of these properties could be at risk from a similar event before the reconstruction could even be completed.What is the new premium on a $5-10-20M insurance policy and how could it ever be recuperated during the life of the policy or length of the average 30 year loan? 

I've noticed properties that are 2 bedrooms or less tend to perform better on this platform. 

I would say it depends on how well the chunk of cash in your 401k is performing compared to the asset you are acquiring.

Sometimes the market changes or can't absorb the rents that they want, so they issue concessions to make it appear as if it's performing as intended.

But, I bet-ya it's also effective.  

Therefore, if you look at history, real estate has continuously performed in an upwards fashion while, like any other investment, has experienced short lived corrections from time to time.