I understand this mentality for a flipper but what about a buy and hold property?

I am assuming it is a tad bit different than the "let go buy a home, honey" mentality I used in my home buying adventures.Just.. where do I start?

I told him that the house had foundation issues...house is split in half from left side to right side of home because of my mentally unstable aunt who failed to water during the drought in Houston 2011.

Single family, maybe duplex....We need to get over this mental hump!!

We started up a  band rehearsal facility .

As long as they aren't mentally disabled, etc, my conscience is clear :] You have to understand most owners of distressed properties are in damage control mode.

However, there are still requirements including a letter from a mental health care professional. 

I don't necessarily buy into his "no debt ever" policy but I do believe that for the average person his tough love mentality is the way to go.

Even if you say the money was inherited and handed to them in a silver platter, someone some time ago had a process they fine tuned and worked to make it to that event.You need a process and you paid $7000 for what you thought would be an event that would grant you access into inevitable success, but the only thing you will get if they come through is an inside look at their process.As I see it you have two options:1) Bury your losses and stick with it and demand what they probably promised (an inside look at their process), then try that process and see i it will work for you2) Bury your losses and move on to find another process or create one yourselfNotice both options start with bury your losses.It will take every ounce of mental power to do this, but the lost $7000 should not be a factor in your decision.  

The mentality reminds me of how you have to be an "accredited" investor (basically filthy rich) to invest in things like an equity position in a start-up which could produce an enormous return especially if they went public although not likely (yes I know!).