Appreciation: Same logic as above.

There are logical reasons why buyers don't make the promised returns and why they keep coming up with another similar deal over and over again.

I believe that this is due to (finally) rising interest rates deflating asset values, which is highly correlated to the exponential increases in income for top earners like CEOs, executives, money managers, RE investors, and Private Equity Groups.To me, the only logical stance is "rational optimism" (I heard this term from Morgan Housel).

My logic tells me it would be the lower property owner who would be responsible for having retaining wall, but black letter law, or case law may be different- I don't know???

Follow the logic - you bought at $100SF and now it's at $300.Buy now at $300 SF and where will it be in 10 years?

Not following the logic here... what makes you think this is a brand new agent?

The bank I have been talking to for the loan / construction loan seems to be willing to apply that logic. 

Rebuilding cost by the insurance= $600kNow logically speaking, FMV should be >= Rebuilding cost. 

He discussed each one of my fears in detail and logically explained how those fears were "far away" from happening. 

None of this seems concrete and there´s no solid way to make any logical conclusions.