We have not even dove into issues arising in the event of a non-assuming grantee filing for bankruptcy.  

Has anyone had a tenant declare chapter 7 bankruptcy before?

I would keep the 401K and if you want to get into real estate, save up money on the side.If you take out all your retirement savings, invest in real estate and it goes wrong, you could end up filing bankruptcy.

The wife had lots of bills in her name alone, and that were not being paid, and had been the one to declare bankruptcy alone.

I vote for NO, only because you cannot discharge student loans in bankruptcy.

Ignore your responsibilities to manage your investment and your PM can run you into bankruptcy.

There are a couple properties I am currently looking at, but one appears to be killed by the fees associated with the bankruptcy trustee (I think this is the correct term) sale (over $23,000 on a 70k property), another one has water damage throughout and black mold, a different property has what appears to be foundation problems (the front is leaning outward and large cracks) as well as sealed siding which appears to be rotting under the tarred, fake brick layer, and knob and tube wiring.  

@Michael Delpier The cash out refi to pay off your primary residence would certainly afford you some protection in a state that extends such liability limits depending on the structure of the state bankruptcy laws.  

But when you look into this particular market, I can tell you that The City of Detroit literally filed for Chapter 9 bankruptcy.

Maybe had to sell for a loss, maybe bankruptcy.....who knows.