REI has processes in place so portion of the Security Deposit/ missing rent had to be covered by tenant.

Security deposits have to be held in an escrow account disclosed to the real estate commission which requires a yearly report and all leases need to disclose your license information.

This is a passive way of earning with real estate-based security, protection and insurance.

The mortgage is secured by the real estate.  

However, deeds in lieu of foreclosure can be subject to judicial attack by their grantors and their grantors' creditors.Grounds for attacks on deeds in lieu of foreclosure include the following:• That the deed was an equitable mortgage - that the parties intended the deed to be given as security for a debt and that the deed was not an absolute conveyance.• That the deed is either a preferential or fraudulent transaction within the purview of the provisions of the federal Bankruptcy Act or any other related state law.• That the deed is a device to clog a mortgagor's right of redemption.• Unfairness of the consideration.• Coercion, fraud, oppression, duress, and undue influence.• That the deed is not subsequent to the execution of the mortgage but contemporaneous with it.• That the grantor/mortgagor was insolvent at the time of the execution of the deed.An estoppel affidavit (executed and acknowledged by the grantor/mortgagor, attesting to the fairness of the transaction, the consideration exchanged, the value of the property, and other factors showing an intention to make a genuine transfer) or a recital (inserted directly in the deed) are supporting documents used to forestall challenges to these transactions.State law and local title standards must be consulted in regard to the consideration and treatment of deeds in lieu of foreclosure.What a GREAT post!   

Thank you Eric.In addition to the rental properties, my wife and I have a paid off house, paid off car, and about $1.4m in retirement accounts, brokerages, and savings.We live in a HCOL area and our expenses are $9.5k per month even though we live pretty modestly.I set out initially to have real estate pay for at least some of my expenses in order to give me more freedom and financial security.

Some lenders offer creative solutions, like a cross-collateralized loan, where they use your existing equity as security without refinancing the duplex.Another idea is partnering with private lenders or exploring a second-position mortgage, depending on your lender's terms.

Focusing on the best quality real estate will allow you secure more favorable financing terms, more likely to achieve favorable exits/refinances, more likely to attract the best capital partners.

IN these cases they took title sub to from the sellers .. ( but in the case your describing its the same thing you have a senior note as most investors will want security) they then sold on contract to buyers with small down payments and credit challenged or income challenged and they did about 30 of these in a year or so.. worked hard at it..

Since they are responsible for maintaining the relationship with you after the transaction closes, this approach adds an extra layer of confidence and security to your investment.