: )Sec 121 is surprisingly taxpayer friendly on what constitutes unforeseen circumstances regarding failure to meet the 2/5 rule."

Jay, as a 20+ year banker that witnessed both the S&L meltdown in the late 80s/early 90s, as well as the commercial bank failures beginning in the early 2000s, from Ground Zero, I thoroughly understand the need for strict underwriting standards.  

I know I'm simplifying this, but the main thing is don't be afraid of failure!

I've always been well organized and goal-driven, but suddenly realized that I've always struggled with the fear of failure; thus, I've always made my goals smaller than what my potential would actually allow me to accomplish.

BK comes after a failure to settle, a trial and judgment award to the plaintiff, and then an assessment of the judgment. 

Having multiple GCs also means our business doesn't have a single point of failure.

Here are a few for the list that come to mind:-Failure to check that Broker’s representation of nature and condition of collateral is correct;-Failure to catch that Borrower is substantially overpaying for property;-Failure to verify that Borrower statement of business purpose of loan is inaccurate (loan in reality is for personal, household or family purposes) making loan subject to consumer protection laws and disclosure;-Failure to verify that insurance is sufficient and the type of policy that covers lender as insured for loss; or policy lapses after funding and servicer does not catch it;-Failure to verify that broker or arranger is properly licensed such that lender exemption from usury is invalidated;-Failure to monitor and require borrower to keep property taxes current;-Title company e-mail gets “hacked” and you wire funds based on fraudulent e-mail-Not understanding the limitations on your options and problems that come up with "fractional" (multi-lender) loans when they go into default-And here is one for the books that actually happened:: arranger comes into possession of notary stamp and commits identity theft by convincing lender, brokers, escrow and title that she is the person who’s identity has been stolen.

I blame most of the failure on the economic crash, and the rest on mismanagement.Having built around 100 new construction homes in 20ish mile radius of this location in the past 15 years I knew the area well.

I shared the successes and failures within the deal to learn more, as well as to show the lender that I was being very real with the deal.  

I wanted to take the option of failure off of the table.