If (when) the buyer prevails, then the collateral is out of the picture and trustee, borrower and lender only have each other to sue to make someone whole.

Then what collateral is there, the shell with a neon sign, some yard signs, a magnetic sign for your truck, some radio copy, forms, contracts and a phone number?

In the event of a default, the mortgage provides the mortgagee the right to seize the collateral offered to secure the loan.

Is there an investment reason for not wanting to use the car for collateral rather than the property, other than the car loan simply being classified as a consumer loan?

It will make it extremely hard to compete with the investors who know how to run thinner margins and don’t require as much of a buffer but I highly doubt if they are putting up their homes as collateral if the deal goes bust.

@Tyler Flagg- My favorite TTP is to use a line of credit to purchase as rehab homes, then collaterize the debt aginst the home with a REFI. 

I've been known to lend to lend to people of less than stellar credit, but on an over-collateralized basis.    

A big market drop may cause a big loss in the value of the account, resulting in a "margin call" (the need to increase the amount of collateral in the account to maintain that 50% minimum).

, but for investor to investor lending where you trust the guy borrowing your money and where you ensure that collateral is sufficient for the loan, you shouldn't have to worry about sophisticated underwriting or legal issues.

You could also get a loan agreement with a commercial banker to take all your properties as collateral so you can use the equity from each property and turn it into a mini mutual fund of investment properties.