Independent of the legal / regulatory restrictions, the ability to buy you out is a function of the GP having the cash to purchase back your position.

It is a policy designed for the lowest possible death benefit consistent with the regulatory definition of insurance.

There is a lot of regulatory oversight by the Feds related to this.

Additionally, requiring a borrower to go delinquent before consideration, would subject the servicer to penalties and sanctions by CFPB and while CFPB is tasked with regulating banks over $10 billion in assets, that financial institution's regulatory authority will follow CFPB rules when nailing the servicer for their violation.

As a licensed broker, you are in very risky territory and the local MLS is specifically targeting people doing that.The Department of Regulatory Agencies (DORA) has been fining people and taking their license for similar matters.

I'll second what Jennifer said, you can run into a lot of regulatory and legal problems with hard money lending, so I would start by trying to find out first, is there a trade association in your area for hard money lenders? 

This is important because you have a responsibility to provide water to your residents, so make sure you are comfortable with the system, the equipment, and the regulatory requirements that come along with it.Sewer - I have just as many parks with septic as I do with sewer.

I think it highlights the big-picture reality, which is that current regulatory risks associated with short term rental investing are significant and multi-layered.

You should then be able to verify their license with the regulatory agency in their state and also likely here: http://www.nmlsconsumeraccess.org/.

If you've already looked this up and you are good to go on the regulatory side, then I would start by finding what the "pain point" is for the landlords in your area.