This is the type of behavior that gives everyone involved in any sort of real estate a bad name.

Keep doing the right thing and in time that behavior will bring you more deals.

Boost it back up in six months.Usually, past behavior is an indicator of future behavior, but sometimes Life Happens.

My surprise comes from the fact that this sort of behavior is short sighted on the sellers' parts.

I'm tired of spending hours of my time screening properties that are clearly not suitable.Is this common behavior in the industry?  

It took a good year for me to not let tenant behavior get to me.  

I would even have monthly maintenance so you can observe their behavior.

I have done flat fees for water/sewer/trash but this is my attempt to change wasteful behavior

I don't think there is "most likely scenario".Each note has its own history, behavior and performance.All of the scenarios you mentioned can happen and I run into all of them during the years I am investing in notes, and note status can change on daily basis (a borrower that is working, healthy or married today might change status tomorrow).The tip I can give you is that when you are doing due diligence prior of investing, you should take worst case scenarios and check what will be your profit in such scenarios.If you are well protected and have multiply exit strategies, you will be able to earn even in such scenarios, and of course earn much more in more optimal scenarios.I can tell you 3 things about the note you mentioned - - I like it is a medium term note (13.75 years, not the 20 or 30 years note)- The LTV is very good, so you have good protection here- I think I have read somewhere that statistically there is a higher chance that a note that have once been non-performing will become non-performing again in the future (not sure if this is correct).Good luck,Eran

I'm not sure what the tenant's behavior has to do with the situation.$20,000 is a relatively small amount.