In addition, double check property taxes as I found this is nearly always understated beforehand and usually will be double to triple to what any seller quoted.

In my view Michael understated the risk to landlords the park managers are.  

I'm also aware that 99% of borrowers walk away, not sure just guessing there, and probably in most cases there is not a great deal of equity, but if there is and you lend/foreclose to gain properties you'll have several issues if someone cries foul, you can be sued and you'll lose as the concept of collateral is not as a profit center but to ensure that a lender doesn't lose amounts lent.That's true in all states, but can be more of an issue as to the disposition of collateral under state laws, imposing types of sales, reduction of price or holding auctions.

Inflated ARVs, understated rehab costs and no understanding of whats a good ROI for an investor seems to be rampant.

The trust doctrine can apply even though the arrangement does not constitute a trust under state law.

Also, I read on page 4 of the ordinance under State Policy that owners with less than 10 single family home units are exempted. 

First of all pro formas all understate expenses.

Same conclusion, those on the lowest end and those on the highest end give the most, though percentages presented here vary slightly from the other link.Given the large #s, I'd be willing to bet its broadly accurate, and if anything understated at both ends.

In a nut shell,  many of the properties are in mediocre areas and the true expenses are understated. 

If they're understating the expenses in their information, this should come out during the due diligence.