I think a triage system is best.For example, if something critical occurs, like plumbing leak, you want to respond same day to mitigate damages. 

It was a very tumultuous situation, and we were trying to mitigate the issues on a sinking ship.

the risk of getting sued is close to equal to the risk of a bank calling due your loan after a restricted quit-claim rendering both the mitigation and value of process moot.

I told her the best way for her to mitigate damages to allow me to start showing the property to get new tenants in to get them off the hook ASAP. 

But, with a rejected short sale, the title Gould have no issue releasing but you could likely get a release signed from the loss mitigation rep handling this property if you needed to.

Deals in this market yield 16-18% total IRR and 8%+ tax mitigated yearly cash flow. 

So, theoretically, if you took out a $22.5k loan, once you paid it off and waited 60 days, you'd be able to take out another TSP loan up to $27.5k or 50% of your TSP balance, whichever is less.The only downside I see is potentially missing out on market returns (mitigated by earning a return through the real estate investment) and if you somehow end up leaving federal service, you owe the full balance within 90 days (pretty sure it's 90) or else any remaining balance is treated as a distribution and subject to income tax and an early withdrawal penalty. 

You have to explain the risks in the transaction, their mitigants and also what they are investing in (e.g. equity versus debt).

My main thing is to the extent we can is to let folks know that real estate is NOT without risk.. some folks for whatever reason think its a for sure thing.. and this site does  a good job helping people mitigate that risk..

You could also instead focus on having an excellent operations team to drastically increase the NOI thereby mitigating the effect of the total equity change.