@Michael Hayworth I'm also noticing the guy who has bought 15-20 at auction is a contractor ;)  That has to help mitigate the "hurt" of a property being worse than anticipated.  

I 100% believe that you can mitigate some risk through diligence.

No movement after the fact will totally mitigate that tax.  

-Will this devaluation mitigate all of the returns gained during it's time as a rental?

Acquisitions team, renovation crews (fully licensed and insured), Property Management, and a Real Estate Investment Brokerage in case you ever decide to sell.By teaming up with a solid firm you can mitigate your risk and have some "boots on the ground" that have your best interest in mind. 

I do think that you -- all of us, hopefully -- try to mitigate risk as much as possible.

The tenant did not mention his personal property being damaged and he should have insurance to cover his own belonging.If the tenant had renters insurance, maybe his coverage would extend for displacement and then his insurance company would go back after the landlords insurance for mitigated damages.

Basically what-if scenarios - just like you running multiple analysis.One can only mitigate so much risk, and decide if the deal is worthwhile to pursue. 

The bank will assign someone from the loss mitigation department and you or the seller will have to communicate through them for the entire process.

You are never going to be able to avoid risk using a BRRR strategy but you can take steps to mitigate those risks.