you will lose money.  

The first commercial option was sold to someone else and we are in escrow for the condo one but ready to fold that deal due to several reasons that have made us lose faith that this is a good investment.

Be mindful of Excess Business Loss rules3.

So if someone tells you, it does not matter about liens behind you - it does.There’s one more ; the borrower has increased debt service and when it either turns negative or leaves nothing “in their pocket” they may lose interest in the property, decide to stop paying all mortgages, and put whatever income they can into their pocket until they lose the property to foreclosure or one of the lenders obtains a court order prohibiting such.   

https://www.amazon.com/FLIP-Find-Sell-Houses-Profit/dp/0071486100If your unsure and your paying for the work to be done this book will give you a good general idea on what order to do things to save money and excess appointments from the same trade.

Losing any license for that matter RE  Mortgage Broker etc etc. you have to really make a boo boo or have a scheme going.As you know the NPL space takes a very well put together team..

Here’s an instance where the note holder will lose part of their investment.  

Is it one sided where after acquisition the sponsor has nothing to lose?

You will have some 2 year old furniture that might be of some use, but its a losing proposition in my opinion.

But at the end of the day, well located properties in which the owner has ample liquidity to ride out long-term cash flow negative periods, rarely lose money.