It seems as though many turnkeys are purchased for the long-term but there may be a time when the market dips and the investor may have to sell at a loss because it was purchased with little equity to start off.

Big loss, but better that you didn't stay in a bad partnership.

I look at it because Buffalonians are still as a whole renters and there are a lot of cheap buys in that area (say $10,000 on a fixer double)  that give you room to get into the market and also to charge lower rental prices to make sure it stays filled without suffering any real losses while allowing the inevitable push towards the area in the next 10 years when all the west side neighborhoods are overflowing.As a whole, very little stays on the shelf in the Buffalo market today, particularly in the city.

We also don't have a ton of cash reserves to just eat a $30k loss on a conventional sale with the CT property. 

I wrote an article a couple of years ago as to why one needs a 'GOOD' Profit and Loss Report, that engulfs great detail and I have included it in this post to you.  

--Gary, Pennsylvania The short answer is nowhere, assuming that by safe you mean an investment that will provide the return you seek without subjecting your principal to the possibility of loss.

Most reasons have already been stated above such as: job loss, medical health issues leading to job loss, divorced spouse/domestic violence issues, allowing their adult children, boyfriends/girlfriends/former spouse  move in that are not on the lease and whose financial and rental history would fail to meet rental criteria set by you. 

I also understand there might be other circumstances attributable to the note itself or servicing of the note that would cause loss of 2nd lien rights.  

You are talking about forcing huge losses because you think there might be losses in the future.

My growth properties (more or less) offset my income properties, as anything I pick up during the year is going to either break even or show a loss on paper, by the time you consider depreciation, rehab costs, etc.