By adopting the house-hacking method—living in one unit while renting out the others—we plan for the tenants to cover the mortgage and gain valuable property management experience.

I hope your attorney can help you and remember to stream your energy to find the next deal yourself so you can cover this loss; this is the most helpful way to let go of that feeling of being scammed.

That is one of my moves is to report Baselane to FTC for such fradulent practices, despite covered in footnotes in terms and conditions.

The part of the home you live in can be covered under an HO3 (homeowner’s) policy, but the rented unit needs to be covered by a landlord or dwelling policy like a DP1 or DP2.

I have umbrella insurance under my personal names currently so I'm wondering if the umbrella insurance would cover me in the event of some liabilityQuestions:- Am I better off keeping the rentals in my name since I have umbrella insurance?

If you convert it to a rental and sell later, you may owe capital gains tax + depreciation recapture, unless using a 1031 exchange to defer taxes by reinvesting in multifamily.Leveraging $100K in equity via HELOC or cash-out refinance can help fund the next deal, but ensure rental cash flow covers debt, expenses, and reserves.

At this point, instead of continuing to pay the interest loan payments on properties that we will never be able to financially finish since the rehab loans will not cover the actual cost of the rehab, I wanted to know the ramifications of returning the properties to the loan servicer, deed in lieu.

It is investment banking, so the rules are much different than your "normal" lenders who offer mortgages or loans to cover a single or portfolio of collateral. 

I would look at it in terms of whether you can afford a worst case scenario where you're covering the deductible and have a credit line or cash to front the re-build cost and getting reimbursed from insurance afterwards.

The main factor is will rents cover the debt liability and can you sustain 3-4 months of no income to cover the debt?