These are everyday experiences.If you borrow equity from your primary home and the investment fails, you risk losing your primary home.

This means the location must possess the right characteristics to attract new businesses.If the city fails to attract new companies, soon only low-paying service sector jobs will remain.

However, there can be various reasons why a rental home fails to generate profits.

As long as USA keeps running around high on smell of our own farts of greatness long-gone, we WILL continue to fail, and fail HARD. 

Remember, C/D located properties generally appraise once improved for significantly more than they will actually sell in an arms length transaction so you can go to many C/D neighborhoods, successfully complete the BRRRR method but deal with  all of the operational difficulties of the asset class and then fail to achieve a sale figure remotely close to the favorable appraisal  that allowed for the proceeds to be returned through the refinance. 

Fail on paper first.  

This is why a lot of the crowd funders failed as well.. not only picking poor projects but they had hordes of small investors throwing  money at them..

Contractors all the time either fail to finish or finish in a way that prohibits you in selling and exiting or refinancing at the number you expected and now you have to leave way more in than you thought. 

If you fail to follow the rules, you may open your personal assets to a lawsuit.

@Pat Aboukhaled wife & I have thought this would be a great use of failing malls for affordable housing.Unfortunately, as @Greg Scott points out, many people take the path of least resistance, which can ruin the idea.So, you'd want security cameras and maybe even security guards to hold residents accountable.