The investor who uses leverage and goes bankrupt posts an IRR of -100%. 

The ones that didn't went bankrupt.  

I never went in 'big' as I saw my best friend from high school and my brother go from 12 and 14 properties to both bankrupt in a few years after the 2008 bubble popped.  

This is a perfect recipe for how to go bankrupt trying to be a house flipper.

. :) The federal funds rate is just the rate that the Federal Reserve Bank will lend at overnight to private sector banks, what those private sector banks do is then entirely up to them, but obviously borrowing at a daily interest rate and then lending for 15 or 30 years isn't what they are doing (they'd go bankrupt).That being said, that rate on a 15YF seems absurd.

For me personally, if I risked it big before I was ready and went bankrupt, I would have an awfully hard time getting anyone to ever invest with me...Not to mention you will have a rough time getting a loan in the near future or renting a nice house.

They would be bankrupted. 

Assuming you don't have a huge personal net worth, why would he/she (i.e. the attorney) spend a whole bunch of extra time to bankrupt you? 

Do I believe that this means every sponsor is going to go bankrupt in the next recession?

If PM companies guaranteed what the op wants, all pm companies would simply be bankrupt and out of business.