I would imagine that if I entertained a contract to L/O, I would have stipulations that covered my potential issue, as well as the other ones such as divorce, bankruptcy, etc (which even a Subject 2 from what I read from you are potential issues).

It is too easy for a "Company" by any form to simply file Bankruptcy and leave their Tenants in your property.

If the police, fire, and lighting get upgraded once all that debt is gone after bankruptcy, then the value of the homes will increase.  

Do you know if the borrower filed bankruptcy?

This isn't meant to come across as mean; just that there's people on here with 30, 50, even 100 SFR's ALWAYS factor 10% for vacancies, evictions, nonpayment.Can your tenants lose their jobs in December & your left with no tenants for 3 months (it's very difficult to compete with Santa these months & if you can find a tenant then, they're probably high risk); can a tenant declare bankruptcy during their tenancy & stay in there & it takes months to get them out?

A tenant that applied just filed Chapter 13 Bankruptcy several months ago and has a 600 credit score.

For your first seller financed deal, you don't want to get into bed with some investor long term, like ten years being tied in, there are loan issues that can make you wish you had never done the deal, like a bankruptcy and the borrower reaffirming the debt and the court doing a cram down keeping the note in place.

When that comes how do real estate investors weather the storm and not wind up declaring bankruptcy?

If the borrower declares bankruptcy, it holds up the whole process, while your legal, tax and insurance costs continue to mount.

I'm pretty new to the rental business.I have someone interested in my condo, but his credit is really bad,and he is about to file bankruptcy to start fresh.