CA there is NO possibility of a deficiency judgement on a purchase money owner occ loan.. borrower can walk and the worse that happens is their credit will have a foreclosure if the bank goes that route or a deed in lu. 

Keep in mind TExas allows deficiency judgements so thats a risk and why you never want to sell sub to in Texas especially

Also - it sounds as if there may be a deficiency here.

Quote from @Joe Villeneuve: Quote from @James Hamling: @Victor Tofilski I can't tell you exactly why it hasn't leased yet but I can pick it apart and give you detailed road map of every deficiency I notice and how to correct. 

Taking real time notes on deficiencies allows for clear understanding if the items make their way to a buyer repair addendum.

The Home Inspector report revealed major deficiencies in the rehab and the Home Inspector told me that the rehab was like “putting lipstick on a pig”.

Upon the ownership of the note, you could offer DIL with no deficiency to the borrower to leave.

There can be redeeming factors that counter balance a deficiency in a particular area. 

The contingency reserve may be released only if required, necessary, and unforeseen repairs or deficiencies are discovered during the renovation.

I don't see any deficiency there at all.