I plan to do this when I purchase my first property in order to protect my other assets in the event something goes wrong.3.

Add A-players to these systems and you can operate multipleproperties with the same level of 5-star hospitality as you would with one home.

There is a reason Tenants are a protected class.

On the flip side, if you can get your properties purchased or refinanced into conventional loans, there is buyer protection there that does not allow the banks to call the thing if you're making timely payments.So essentially, if you have the conventional loans, you should be well-protected to use a more aggressive leverage-heavy strategy.

Etc.Essentially, you're banking on these units being financeable with conventional financing after taking ownership, but don't have the protections in place to ensure that is the case. 

I noticed a few new players lending in the Bay Area multifamily bridge space at 90% LTC, and I had a feeling the party would end soon.

2) How can an investor be protected from the above?

However, as Jeff stated, “a system produces what it incentivizes,” meaning that the more intervention that protects people from struggling though a situation like this, the more we incentivize people to not change behaviors. 

I thought this may be best option as it still gets bank in space on time (and protects me in case there are issues with title). 

If your zoning application WAS approved, you would then have to submit signed and sealed alterations plans by a registered architect that demonstrates that the conversion meets all current codes, including existing building, Architectural life safety, Electrical, plumbing, mechanical, energy and fire protection.