The way I buy houses determines my success or failure on a real estate investment.

I wanted to be proactive and not let my fear of failure stop me from moving forward in this process, but I am VERY much learning as I go along.

Depending on state law where property #2 is located, Since you have an additional consideration in this deal as a swap, your deed of trust might include a deed-in-lieu-of-foreclosure as a cure for default in payment (not to failure of keeping insurance or taxes as they should be advanced).

If nothing else - I want him to return 4 months of 'management fees' he deducted from rents received for his services - mostly since he has not abided by our contract and has failed in his responsibilities.Our contract states: "Agent shall not be liable to the Owner for any loss or damage not occasioned by Agent’s own negligence or failure to comply with its obligations."

I won't be able to grow much without criticism or failure and I can't help but prefer the former!

Looking at your photos I would be immediately concerned about structural failure.

In the deed of trust, there is a power of sale clause which gives authority to sell the home to pay off the mortgage balance if there is a default [failure to make mortgage payments].   

Oh and to get the great deals we buy short sales, and we have had lots of "failures" before we have had great success. 

When global interest rates followed T-Bills on a fast upward trajectory, these countries defaulted on their debts.In today's global economy, when a country like Greece even sneezing in the general direction of a default can cause money institutions to panic, it makes me wonder how these same institutions would react to an interest-rate-related cascade failure due to interest rate hikes.

Don't let the fear of failure stop you.