In str there is no right or wrong as the spectrum of items in this area is vast- location, type, size, etc etc etc. 

There is protection from some of the things they tout, but I believe it is not necessary for the vast majority of investors.If you look at the truly big movers and shakers on this site, Brian Burke, the DeRosa group, etc. you will find none of them use this kind of a structure. 

you are kind of dealing with three diffrent issues here, the thing about not being a legal three unit, super easy don't buy something that's not legal, and your agent really shouldn't be encouring you to break the law, the issues with properties being beat up, the vast majority of multi unit's that sell have some wear & tear that's often the reason for selling, being a tired landlord, if you want turn key, you are proably looking more single family homes or paying big dollars for a turn key multi if it even exists in your market, 3rd we can debate the pro's or con's of this this market but youve hired and agent and 99% of agents are going to tell you its a great time to buy, i'm usually more measured but that's because I have a deep psychological problem in which I care more about being intellectually honest than making money, most agent's however are not afflicted with this disease so your gonna have to make this decision for yourself before you hire any agent.

Where a home warranty MIGHT make sense is for someone who is not in a position to budget money from rent for issues or where they cannot allocate sufficient reserves in case of an emergency.

You don't buy a house sub2 if you don't have sufficient capital to make payments if something happens to your renter/buyer.  

I just don’t see this vast amount of time being spent to justify it.

I talked to an attorney a couple of days ago who has experience with real estate and he said that in our area in Utah knowing the tenant's name and address is sufficient to file a judgement. 

I don't know if this is common in most politically blue states, but I heard a lawyer from Los Angeles once say this (from his experience with SoCal judges): the failure of a tenant to procure renter's insurance will not alone constitute sufficient grounds for eviction under a lease agreement.

The vast majority of escrow/title companies still use email to send/request documents e.g. disclosures, wire instructions, etc.   

80LTV should be attainable if the ARV is sufficient and comps are there.