That's only if you have excess capital to allocate. 

I usually allocate about 1% to 2% of my monthly revenues for supplies for bath & kitchen.

While it is no longer an issue, in the beginning years, the cash required to acquire and maintain the home could have been allocated to investments that would have given me financial freedom much sooner.

As such, $240k is the cost allocated to the building.

How could allocating tens of thousands of dollars in living expenses to someone else instead of me be intelligent?

Even adjusting the expenses and make them higher (~50-60% rental), some opportunities still seem decent, especially if one allocates a smaller portion of his/her portfolio, for diversification so to speak.Thanks

Then depending on the foreclosing lien holders position and what it sells for would determine were any potential surplus funds would be allocated. 

Most people will calculate some sort of hold-back in gross rents to allocate to cap-ex (or what-if) funds but that only works over decades. 

I believe we were also told that shareholder distributions needed to be allocated according to the ownership percentage as well (i.e. if distributing $10k to shareholders, that should also be split 60/40). 

There is no allocation in the contract, it just says that the seller is responsible to pay liens.