While replacing the toilet, a burst pipe caused Cat 3 water damage that rendered large part of downstairs kitchen and upstairs bathroom unavailable and cordoned off for repairs .

Need I be concerned with UBTI?

Along with a kiddy-pool sized litterbox in one corner of a room, cat urine and feces in the OTHER corner of the room on the carpet (newly installed by the seller when I bought), and a smell that made my eyes water walking in the front door.The lease has a clause for Tenant-Caused Damages resulting from tenant negligence.

To whom this may concern, I am an investor looking to buy my second property.

I wouldn't worry about what will happen, cause something will at some point.

Now most of the time we don't see househackers/investors use in-house or portfolio loans from banks because sometimes they have more restrictive guidelines and higher fees for holding it which might cause the numbers not to work or for the deal not to go through entirely. 

I rarely see anyone address the underlying root cause of the issue.

Pro rata is the best but it’s definitely not the fairest and it causes the tenants to be upset, for good reason. 

I'm more concerned on if it's going to be a good deal or not.

Padsplit residents can cause problems with neighbors and other residents because many have substance abuse and/or criminal histories.