I am sure the seller figured if you could come up with $400K and with the property to secure the loan, that the risk was low.

I still have to occasionally remind my wife that it is all good debt.But never lose site of the fact that investing is still very high risk. 

I have a couple of suggestions:1. if you are doing a rehab that will include the wiring, you may get a Renovation Builders Risk policy to cover you.  2.

And james, I don't know that there will ever be a way to avoid the (due on sale) risk being there.Good to know that your finances can cope if and when the banks start calling in those ones.Also, "deeding the property to a land trust where the buyer would be the beneficiary" comes with its own risks, if you're paying the Seller directly rather than the actual Lien Holder/s!

Investors get enamored with the high cap rates (which is just another way of stating the risk the market assigns to a property, not it's true potential).

Interest rate risk might be the most significant risk if you are borrowing.Look at a historical prime rates http://www.fedprimerate.com/wall_street_journal_pr... .  

Don't be afraid to take risks or non-traditional paths.

Also, be organized and ready to provide budgets, draw schedule, LLC documents, and Builder's risk and Liability Insurance.

If there was a document stipulating this it would hedge your risk but I don't think you will find it. 

The $15,000 is just what I am willing to risk while unemployed.