Sounds like a challenging situation all around I would  not cancel the deal, but if he dies and it goes to the estate and probate you may want to start looking for something else just in case...Best of luck. ...

It’s clear that the evolving market, especially post-GFC have shaped your perspective, and you’ve outlined some valuable points about the flexibility and challenges of private lending.The flexibility in ARV and LTV is such a huge advantage, especially for investors who might not have traditional financing options.

Challenges?

What's your biggest time management challenge?

Value and rents should eventually increase to turn cashflow positive and build your wealth.You're next learning experience will be, now that you are out of day-to-day management, how will you be able to handle the inevitable expense challenges?

the midwest has lower price points than other areas of the US, sure, but it also comes with its own challenges - for example, very old housing stock, lots of deferred maintenance, and tremendous demand for the best properties."

You can try and fight it but does not mean you will be successfulI would also be curious to see what your property insurance looks likeFor me this is just another example that home prices are gonna eventually have to soften as between taxes, insurance and Interest rates home affordability is very challenging

However, proving material participation with a full-time job can be challenging, especially if tasks are outsourced, as the IRS scrutinizes such claims.

You can have replacement value insurance and this seems to be what Airbnb claims to provide yet sometimes getting them to pay is challenging.

Maybe the biggest "risk" might be the fact that you cannot occupy the property at all so technically if you run into hard times and need to move into the property thats not intended - but no real more risk.