She claims that it was due to identity theft issues.

One of the properties has been on the market for 5 months and the other 2 months, both are identical specs.  

Never give out financial information or identity metrics at one of these events. 

@John Lewis Your numbers are almost identical to a purchase + rehab I once did.  

Of course, you want comps to be as close to identical as possible in terms of sq ft, beds, baths, rooms, acres, garage, etc.Give me a call if you want and I can give you an idea of the ARV of yours.  

The principal plus the interest received are nearly identical to the original investment amount (but a loss nonetheless).

I would not recommend anyone write their own ppm for non-acredited investors unless they have done several already, the offering is identical to the previous offerings and they know how to file it.

The only thing I can think of is water theft.

I had the identical thing happen to me, when I bought my duplex.

In admittedly oversimplified form:Say an identical 10-unit building a block away, where the units all rented for $1k/mo ($10k/mo or $120k/yr PGI) sold for $1M.