What you need to look for for in both scenarios is for a quick disposition of the property and a negotiation of a waiver of the resulting monetary deficiency (talk to your accountant and watch for potential tax consequence!).

She is actually a great dog with a good disposition.  

Do not judge certain parts of town based on some pre disposition.

If the improvement must be capitalized can we take a partial disposition loss?

In addition to de minimis safe harbor, make sure your CPA is familiar with partial disposition losses. https://www.thebalance.com/partial-dispositions-31...Not only are the losses from partial dispositions currently deductible, but the disposition removes the previous asset and accumulated depreciation from the depreciation schedule, potentially saving on depreciation recapture in the future.

Do I just send the disposition of deposit to the address and move on or is there more to it to make sure its done correctly?

Get copy of move out's for previous tenants so you know disposition of when they left.

Further, it seems the limited servicing platforms don't have much experience in the staff to properly guide the investor and push the loan's disposition.  

If all you have is the $200k and you deploy and the borrower defaults you won't have enough money to make advances to disposition the loan.  

In time I could have safely weeded out the bad apples who may have been of a violent disposition, but I'm not sure the juice was worth the squeeze.