A good quality structure built by a Master Builder will stand the test of time, vs. a scrap of paper, or an entry in a data base, based on how much the next person will pay for it.You can add value to structure and collect rents even in the bad times.Where people run into trouble is when they borrow too heavily, and the bank takes the "Still Valuable" asset from them.With a stock, it's a roulette wheel gamble, as to how much it will be worth at any given time. 

I guess this will be a test case before the community.

For example, if there is a bunch of demand for apartments and a lack of supply, you might want to build an apartment building, etc.If you interested in testing you real estate development knowledge, this quiz is kind of fun:https://www.developbuildings.c...

My uncle is a Real Estate Attorney and he gets confused about some of the laws , They contradict themselves and haven't been tested yet !

A great way to test your tolerance for this without the 350k obligation.There is value in owning rental homes, and I own many. 

I think this is a good time to talk to others that have past that could give me some test taking tips.

Bankruptcy due to a one-time event (divorce, medical issue, etc.) may deserve some consideration, but you don’t want to be the test case to see if they will recover.

If you are determined to deal with the person you can test the waters by demanding that all moneys will be held in escrow with your attorney until funding.

FHA may be a good option but keep in mind the loan limits and self sufficiency test if it's 3-4 units.

Robert Herrera I agree it seems very slim that you would get in trouble for renting the first year of a FHA loan, but it is still against the contract a person signs.