Unless drastic measures are taken to mitigate the flood risk its almost certain happen again.  

I know there will be things that go wrong with my first investment in real estate, but I want to start gaining that valuable experience early on so that I can learn how to mitigate these in the future and grow as an investor.

You need to show potential investors that you have done everything to mitigate risks, that you have covered all bases, what your plan is if A goes wrong and if B goes wrong.

An experienced developer can mitigate this somewhat; a new developer, probably not so much.

This can be mitigated by looking at his bank statements and match them up to his tax returns. 

I agree and will have to mitigate my risk as best as possible.

In some states landlord has a duty to mitigate loss (attempt to re rent).

The main objective of the asset manager or risk mitigation manager is to try and clear the books and most of them do this by selling the note to the property.

Work out your worst-case dollar scenario and work backwards from there to mitigate the risks.

Since I am not paying him a dime more until work is completed, I think my downside is somewhat mitigated.