I just want to get the facts straight here:
– The family currently owns in your neighborhood? (Vs currently renting).
– They’re looking to walk away from their mortgage in order to rent from you?
– Is their current house for sale (short sale)? Or are they looking at just doing a jingle mail?
– What is to prevent them from doing the same to you? Breaking the lease…
I guess I consider the fact that it appears (based on what you posted) that they’re not even trying to short sale, that this is a bigger red flag than the bankruptcy. At least in my book.