Based on the opportunity value of cash and the risk posed by having dead equity at risk to a market shift.All equity in the property is now only earning a return equilivant to the prevailing mortgage interest rates.

For example, if the heat goes out in your own home in the dead of winter, you can say, "Meh, I don't have the money right now for a repair person. 

Hi, I did private lending to one of my friend , he mortgaged his investment property as first lien with me.agreement was that he will pay interest monthly, and he was almost regular on that.in July that property got  deadly fire, in August beginning he paid my interest for July and didn't mention anything about fire.today, he called me  and told that he wants of pay off(but he didn't pay last month's interest).I said OK start processing for payoff, but pay me last month's interest asap, then he told me that house went on fire and he is hoping to get insurance money and then he will pay, he has no money to pay interest .Now, my concern is should I wait and watch or I need to take some pre-action to make sure that I get insurance money since I am on first lien.That was my first ever lending :-(. 

Hi, I did private lending to one of my friend , he mortgaged his investment property as first lien with me.agreement was that he will pay interest monthly, and he was almost regular on that.in July that property got deadly fire, in August beginning he paid my interest for July and didn't mention anything about fire.today, he called me and told that he wants of pay off(but he didn't pay last month's interest).I said OK start processing for payoff, but pay me last month's interest asap, then he told me that house went on fire and he is hoping to get insurance money and then he will pay, he has no money to pay interest .Now, my concern is should I wait and watch or I need to take some pre-action to make sure that I get insurance money since I am on first lien.

Leaving 80K dead equity in this property will completely kill your real cash flow from the property.  

Now, I'm off to figure out how to clean up all the roach mess/droppings/dead bodies. 

@Isaac El if the owner is dead and there are no heirs an estate will never be opened.

I would say this, find a cold dead real estate market. 

You could have windows to replace, roof, siding, sidewalks, underground utilities, dead tree removal or trees to tall or close to buildings, parking lot replacement or repair, amenities to add or replace, etc.

I would not double close if you’re dead broke as that will eat into margins.