It seems to me (correct if I am wrong) that for the most part since the government is involved the rent is guaranteed..

It seems like an LLC partnership would be the way to go for the apartment building.

I have good relations with the owner but they are extremely strict on this because if the deal gets out, they will be more overwhelmed with calls than they already are.I found a tenant who seems on the surface to be a good candidate.

If it seems the project will cashflow at that time, it's probably a safe bet. 

Also don't forgot there is tax on capital gain for over $500,000 when house is sold, andclosing costs typical goes around 5%-6%.So unless home appreciates A LOT, it doesn't seem to make sense to own a property as long as you are paying mortgage with interest, unless one can pay it all back in much shorter term (10 years or less).

Seems like a good deal to me. 

We've seen record sales in the over $10mil market (which I will say is a small market probably compared to NYC, Miami, LA, SFO, SEA).My thought is the biggest risk seems to be 8+ year and older homes in the suburban markets, that have not been updated and over $1mil. 

It seems like we are dealing with very similar conditions.I would love to hear how you adopt your pricing strategy with your portfolio.

Since you are in escrow seems like it's pre-foreclosure not an auction sale? 

This may not matter other than demonstration that you weren't doing as good as you thought and you're not as bad off now as it seemed relative to what you thought.