They are not the "Fire Sales" they use to be.If the bank is going to lose money and the loan has backing insurance (FHA/PMI etc) they just say no, why lose one cent when they are insured against loss.

Make sure you are sure you can handle the payments even if your flip does not return what you expect or results in a loss.

A food truck that has the same business model as Toms.

I am at a complete loss! 

So the plan was then to just repair what we could to make it as valuable as we could get it and sell and essentially take that $40,000 loss, and just go from there trying to invest in rental properties.

I dont know about your area but 10% usually covers the CASH LOSS for about 1 month.  

I personally will never do business with someone who I catch in a lie because as a licensed agent I can loss my license for things that others view as white lies.

This way you will be made completely whole in the event of a total loss. 

The issue is that this individual does not maintain a copy of the lease agreements for any of their property, doesn't maintain profit/loss statements, and can't tell me what kind of maintenance might be needed.

CPA regarding annual tax filing as its normal to have annual losses from the tax deductions offsetting the distributions and they can use those to offset some gains when property is eventually sold.