What Kelvin is referring to is arbitrage (borrowing money at a lower interest rate then what you lend it out for) but the anology is a bit of a stretch for the following reasons: - Security: One is safeguarded by the FDIC, the other is secured by real estate quite often in a inferior lien position

Construction loans are disbursed as materials are needed and as work progresses not as a lump sum at loan closing, This is an additional and important safeguard protecting the lender but I know many HMLs may not do that as it's more work, but I'd not do a sizable loan (purchase +) any other way.

The risk is foreclosure may upset them to the point of where they damage your residence - character is the best judge of that, but not a safeguard.

If that becomes an issue you need to see an attorney.In your pricing, consider costs of foreclosure and time required in holding or safeguarding the property.However, any debtor may give a deed-in-lieu-of-foreclosure after the event of default and demand, so it doesn't mean you must go to court, you might get a DIL.

I would also check with a real estate attorney to make sure that the approach is legally enforceable, as a safeguard.

Note: there is posted on the side door a notice from Safeguard Properties but they had nothing to share. 

In addition to your PM, get to know a realtor who works with investors who can write a contract for you next time, put in all the safeguards regarding tenants and inspections, and deal with the seller so you don't have to. 

Unbelievable because even with all the safeguards in lending practices after the last crash I'm quite sure many are going to end up upside down when the market dips and foreclosures will be high again.

What I've seen in the past, and what my husband's family has done for generations, is this; as parents get older, add the children to title with the appropriate legal safeguards so the parents can stay in the property if they wish, so they property doesn't get encumbered in the event there's a need for long term care etc...  

I have not heard anything about what safeguards Cozy has put in place in case they or their third party partner suddenly have stability issues.I'm not saying the sky is falling and we shouldn't trust anyone.