It’s humbing and frustrating, but it also teaches you those guardrails you’ll want next time.. like thorough screening, a solid lease agreement that sets ground rules upfront, and maybe even setting aside a bit more cushion in reserves.Chicago’s got plenty of investor-friendly pockets.

I'm hoping that my property is appraised high enough so that with 80% LTV I don't have to put any cash on hand into the deal to create a bigger equity cushion for the bank.

The capital called equity, or common equity, is the cushion that makes preferred equity more secure so that if values decline further, they can still recoup their investment.

Brandon Turner's Rental Property Investing book is an excellent primer to understanding the happy path for purchasing a property - however in this market it really comes down to having bulletproof assumptions on rents/taxes/R&M/etc. as with rates as high as they are/inventory as low as it is, there is less cushion in your returns if you analyze properties with bad assumptions.

This cushions potential value drops.Syndicator vetting: Only partner with syndicators who have a strong track record in different market conditions.Market and asset class knowledge: Understand market cycles and the specific real estate types (multifamily, industrial, etc.) you're investing in.Avoid chasing trends: Just because a market or asset is “hot” doesn’t mean it’s solid.You’re right that this approach doesn’t cap your upside, quality diversification can still generate huge returns while managing risk.Best regards,Drago

Any transaction done with little or no equity contribution is most probably (there may be a few exceptions) in danger of “blowing up” from over leverage and insufficient equity cushion.  

Have a cushion of at least $10K

I’m talking about getting thorough with expense estimates, factoring in property taxes, insurance, and a cushion for maintenance.

Maybe save a little more. 8K is not enough and it does not give you cushion if a deal goes sideways.

It’s easy to underestimate renovation costs and timelines, so always build in a cushion for unexpected expenses.Good luck with your first flip, and feel free to reach out if you need more detailed guidance along the way!