They are probably unhappy with the home inspection they got and want another third party.

Granted his target audience for this advice is largely those who have trouble managing their finances, but a lot of investors with strong financial management skills might be better off performing their own analysis to arrive at a decision to finance or not.

Of course I will have a business agreement in place stating this.I want to lend the 10k on terms and would like to receive monthly payments until the complex is performing at a certain standard. 

A large loss adjustor is going to come meet us on Monday with one of their preferred contractors to assess the damages and give us an estimate.It seems like the next step, which is probably the most important part of this process is to find a good contractor that can give both us a fair estimate to make sure the insurance company isn’t going to try and lowball us and perform quality work to restore the house.

Build the system, step away, be a service missionary with my wife and kids (e.g. bring clean water systems to third-world villages, disaster relief, etc.)"

Maybe something from B2R which would allow you to roll three or four loans in to one, which would allow you to perform your strategy two or three more times again?

Bank regulations simply would not allow FDIC-insured money to be invested in such a poor credit risk but the beneficiaries of the deceased man's mortgage deserved payment so they sold the non-performing mortgage to a Boise " Private Note Purchaser" for a small fraction of its face value because the heirs lived in a small community and did not want the infamy of being the ogres who would compound the misery of an unlucky family by seizing the home through foreclosure after the occupants had suffered the loss of their son to childhood disease.The Boise opportunist had no such inhibitions.  

I'm also looking at an auction.com property which is up for its third listing on auction.com.  

The third move would be to find an affordable flip and jump in to real estate investment aiming you enjoy it. 

Subordination agreements would be recorded (and they aren't all that common), so just be sure to watch out for them.If there are three loans recorded, and no subordination agreements, and you buy at a foreclosure sale of the middle one, you are buying it subject to the first one but the third one is wiped out.