This is advertised as a “protected” note as Aloha is supposedly fronting the first $100k in the line of loss.

I made a fair size claim last year and it paid off pretty painlessly except for the 90 day lag. highly recommend them.If I had used a regular home owners policy with and STR addendum I'm pretty sure it would not have covered my particular issue.

But for the last 3-4 years local residents have decided it was cheaper to just take the groceries. 

I just found out the property is in a Zone A flood area, which means lower property values and a longer selling timeline.At this point, I’d rather take the $5K loss than deal with the potential headaches.

A 50% decline in asset value would result in a $10,000 loss, double the loss of the unleveraged asset.  

Are you certain you would have to sell at a loss?

So it's very easy to criticize these markets if you've never been here or really know anything about the area and are just making broad, sweeping generalizations, but if you have a strong team on the ground who can help you buy in the right neighborhoods and maximize your returns, you can do very well in this market, and I'm sure Detroit as well.I had a buyer who bought a duplex in Cleveland for 85k last year.  

Quote from @Aaron Letzeiser: REVISED CODE@Aaron LetzeiserI was hoping to work with Obie, but on the last page before signing the documents, I came across this disclaimer, which made me rethink my decision. 

Then I find out a week ago they sold the property at a loss, ALL my capital is gone, and Ken McElroy goes on his merry way making youtube videos about how much money he is making. 

Any tax knowledge of if people doing this strategy are able to take the losses from the cost seg study (on the ADU) to offset their W2 income?