It's not unusual to go into business ventures with people we have a personal connection to, it's just important not to miss the steps you'd take if you were doing business with anyone else. 

Do you think this is so unusual that they may be lying?

It was unusual but the reputation of the school provided a protective halo so it became a neutral/mild positive.

By using a third party representing me I am able to maintain a more unbiased posture, allow the emotion to blow off without influencing my decision making process, and hopefully reach an agreed plan which provides them with time to rearrange their lives and me to suffer the least cost.Btw, not unusual for a relative not to inform their relative tenants that foreclosure is taking place.  

This is an unusually profitable deal though.

My research couldn't find any cases similar to theses unusual facts so I retained counsel who also couldn't find anything on point. 

It may not always be a good idea to buy a particular property due to unrealistic asking prices above the general market or unusually depressed rental prices in the area (e.g., due to crime).

That's the value of an agent who goes hard in the paint on due diligence.Now, an example of an agent thinking creatively and seeing a value-add opportunity that everyone else missed: There was a house that had been on the market for a long time, and the reason was obvious: it was only a 2 br 1 ba house, and the floorplan was very, very weird, so nobody wanted it...however, my agent spotted that the listing had unusually large Sq footage, so we went to check it out...10 minutes after walking into the house, my agent says "we can turn this loser into a winner".

That's unusual and it would be very difficult to find a passive investment like that.Also direct control means you know exactly what's going on.

Even with all this, having an investment turn sour is not unusual.