I didn't know my financials, so when the real estate market turned ugly I only then discovered that I had been negatively cash-flowing for years without knowing it.Had I known better, I would have improved the cash flow for those properties I could, and dumped the losers I couldn't fix. 

After some research we discovered that this was an inheritance house and the relatives didn't want much to do with it.

While this does technically satisfy the requirements on paper, it would never hold up under audit and would be considered evasion/fraud WHEN discovered (not if).

In the end, we always discover everyone is just figuring it out through an iterative journey..

We suddenly had 2 homes and began exploring what our options were and that is when we discovered the intriguing world of REI and tapped into Bigger Pockets and Better Life Tribe, etc. to begin our education.In the time since his death and the probate process we have been paying his mortgage off and selling items from the home which we have been maintaining.

They suggested adding an external cleanout for about $8,000, and we agreed to split the cost by adjusting the home’s price.However, after installing the cleanout, we discovered that the actual problem was far more severe.

I did the math and discovered that most rents in that particular area of HI were roughly equal to the interest, taxes, and insurance portion of a mortgage payment.   

I also discovered that the company in question had a history of not renewing their license and hadn't so in 2011, 2013 and 2016.

To your point above though, the institutional and PE interest in this asset class is a little unsettling.

I also caution in taking on more than double the rehab expense you've incurred in the past - especially with a property that isn't tenant friendly from a parking standpoint; it won't be long before the trekking tenant discovers that trolling for street parking isn't the cruise he signed up for and starts parking in the yard, squeezing in the driveway, or starts claiming defects with the property so he can terminate the lease.