This is so sophisticated.

I think this is in part because of the fact that not very many investors know how to properly invest in the space or understand the sophistication of selling, leasing, managing, etc within the space.

from the little I know and its only because i have brokered 50  100 unit apartments the buyers are quite sophisticated and have a lot of cash and have their lenders lined up.. 

You can see how sophisticated and complicated these are and yet this forum will get buried over time while the most popular forum discussions are things with the normal, simpler calculations such as CoCR.This is exactly why I stopped going to Network Meetings.

Why do we not here of these pitfalls when all are recommended to go over-sophisticate the ownership of residential property.  

Sophisticated investors invest on cashflow where the rents exceed the mortgage plus expenses (and enough money to pay for professional property manage to do our dirty work).Sophisticated investors look at the Rent-to-Value Ratio and look for at least 1% or more to be able to cashflow after expenses.

Any tenant could be taking their entire paycheck to the casino.  

There are incredible restaurants that rival nearby New Orleans and the casinos are clean and safe and top notch. 

I have been watching and researching Hubzu for many months and what I found is that Hubzu has a sophisticated calculation to determine reserve and opening bid based on prior bids, BPO as well as a WAG.Also each property has a local agent/broker associated with it and it looks like the agent/broker can over-ride any number presented by Hubzu.What I do is determine a fair price (ARV) for the property.

@oren H something you said in the question makes me believe that you are a more sophisticated insurance buyer some just look for savins and can care less about the coverage some truly understand the risk and then look to get the coverage.