Gross negligence does not refer to acts undertaken with intent to harm another, but acts for which the perpetrator knew, or should have known, would result in injury or damages to another person.

Told this story here before, we bought a property where the seller had been in a bar fight and had a judgement for medical injuries from the other person in the bar fight. 

When you talk about liability you can offset that by making sure you have a good Insurance policy and close the loan in an LLC.LLC protects you and your assets from lawsuits and any litigation from any and all accidents/injuries.

However, the inspectors are a huge pain in the neck.

Since she's in your neck of the wood.

Buyers were buying at break-neck speed and overbidding on properties. 

Also, put any repairs pointed out by the inspector into the following categories (by priority)1) Health & Safety - to avoid tenant injury and potential lawsuits2) Property Preservation - to stop further costlier damages3) Government Required - city inspection repairs & S84) Marketing Negative Impact - who'll rent a house with purple bedrooms?

Let me address your concerns:The two late mortgage payments due to your husband's injury are understandable and not a deal-breaker for us.

I broke my neck and back at Magic Sands in Kona and was airlifted to Oahu.

Not looking so much for damage to the rentals, but to cover injuries should someone get hurt on the property.