Or should capital always be my first priority to prevent people from taking advantage of me?

Go over exactly what frustrated and drained you the most, and think about what you could do to prevent it next time.

You may want to consider the near South Side versus the far southside.Regarding getting taking advantage of, where a property is located won't prevent getting taken advantage of.

This actually aids in preventing fraud vs the mortgage system.  

What are others doing to prevent them from freezing?

Just want to offer you my 2 cents in case it helps prevent any down the road problems.

There is some special terminology for sweat equity partners in an LLC which would prevent triggering a weird tax event since you don't have any money in the LLC but are eventually getting something for it.Always get everything in writing, including details on what happens if you want to sell, someone dies, etc.Good luck!

Also make sure to budget for some preventative maintenance (this isn't just for older homes), driveways, roofs, hot water heaters, furnaces, and AC's all go bad even in much newer homes. 

Take a look at the link; I think this will prevent most foreclosures which would otherwise come into fruition, so I actually would not bet on a mass foreclosure problem in the government backed loan market.

In some cases it can prevent you from catastrophic loss but for some cases people may only want cash value or functional replacement value.