I'll mitigate this risk as much as possible by trying to avoid deferred maintenance and doing any needed work up front.

Thank you all for your feedback.For those interested below are my numbersPurchase price, $91KARV, $130kEstimated repairs, $4KActual repairs, $8KCash out of pocket at HML closing, $14K (including first years insurance and $4k mitigation fee to listing agent's firm to negotiate with lender for short sale)

There are things that you can mitigate risk, there are also things that you can't, like any other business, you just have to pick and choose the clients/opportunities, not all fits for us, if it doesn't, scrap and move on.

zit think you need to identify the threats and mitigate the risks of those threats to your satisfaction.Bank personnel are unlikely to be trying to pull any clever maneuvers however I used to frequently run into a guy at a local sushi bar.

To minimize that, consider the ways it can go wrong, assess the probability of that thing happening, if possible have a plan B to combat against it, or hedge against it in another way, insure against it, mitigate it, or otherwise figure out how to actively avoid the risk and still get into the investment, and after all that then decide if the total risk is worth it balanced out against the reward.

“Jenifer, I want to help you get out from under this debt and mitigate the effect of foreclosure on your credit.

If you do accept them perhaps collect additional security deposit or prepaid rent to help mitigate the risk (not sure what the laws are in CO regarding max sec deps).Who knows, they may be long term tenants as you know it is unlikely they will be buying a house anytime soon.

We typically explain that we may not purchase the property ourselves and to help mitigate our own costs/risks, we might make a few thousand to get the deal to the closing table.  

@Andrew JohnsonThe mitigating circumstance here would be that those types of buildings aren't readily available for purchase anywhere near me.  

Hey Christopher, Your heads in the right place, mitigate risk!