There funding is almost never secured for more then a year at a time.

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

They sell an older inventory unit, get all there appreciation and equity liquid, and use it to secure 2 new built units. 

Ensuring a solid lease agreement and security deposit will help mitigate this.

Additionally, there’s always a risk that any pet-related damages could be hidden under furniture or otherwise concealed, potentially leaving us to cover the costs if the security deposit is fully depleted by other expenses (e.g., damages or unpaid rent).

However the event of default just gives the holder or beneficiary of the security interest the RIGHT to accelerate all payments and call the note due..

IE securing them paying tax's insurance etc etc. 

Simultaneously, you're managing applicants and tenants, who are often working within tight timelines to secure or renew leases.

This provides you with a safety net for any unexpected expenses during the rehab process while also potentially allowing you to secure higher leverage on the purchase price.