I have not seen much performance difference between S8 and non S8 tenants.

Those loans are primarily based on the performance (income) of the property.

If we perform the same residual analysis as we would for raw land, we would find that there would be less preconstruction costs involved, and a lower builder/developer profit would be required due to the lower level of risk.

@David JenkinsIt's just the ratio of Net Operating Income (what you're essentially earning on your asset) divided by the property/asset value.If you earned $10,000 NOI on a $100,000 property your cap rate is 10%.Now you can compare that 10% to how other assets or investments are performing.

I certainly don't want the huge task of screening tenants and showing the property.I prefer to be a manager of managers.

The generalist while helpful might miss some key things that affects the out come and performance of your property into the future. 

There is a permit to perform work, which is what this front door permit is, I assume.

The locals are in these REIAs  know where the good / bad / higher performing areas are.  

you can always cancel if he gives you the full rent payment.start the process, and keep it in motion until he has performed. 

There is a big difference between a loss on your schedule e vs how the property is performing from a lender's point of view(due to depreciation).