This article from 2015-16 time frame has some great data to support its conclusions  that "a majority of millennials would prefer owning to renting, but they appear to be postponing homeownership because of real and perceived difficulties in affording it."

I would keep all my reserves in one account, based on what my perceived worst case scenario was.

You are likely to be perceived as someone who will be picky like a homeowner but with the price expectations of an investor.

I’ve even heard of some that do deals and put a 1st lien private debt on properties after the fact since an investor is taking less perceived risk since the asset is stabilized.

A lot can go into this decision.It seems too odd of a request to be a shakedown.Plus from a business standpoint some people cannot afford a lawyer (or have warrants and won't use one) and may "retaliate" in some way for a "perceived" injustice (just something to keep in mind).Also, why won't his insurance cover this?

Conversely, it's also possible others have observed the same as you and passed on it due to the perceived/actual complexity/risk of changing it's use.

What kept coming back in my head, and what I kept resisting to let out, is a philosophy that I have regarding people in general, but REI in specific.This isn't meant as a criticism of you, but you can take this as one on what you said above, as a criticism of your outlook...maybe even what I perceive as your outlook on life in general...as specifically applied here to REI.Are you ready? 

As we perceive the economy, interest rates, inflation, taxes and laws in today's terms, if we believe that none of those will change in the next 30 or 40 years, the numbers work.Since I buy "Subject To" and sell on Lease Option to Tenant Buyer's & get $20,000 to $25,000 down from them and cash flow $500 to $800 a month per property, the numbers Don't work for 401(k)'s and IRA's.

Worst case, call the utility company and report the perceived danger.

And that can matter legally because some concerned citizens groups and legislators like to try to crack down on what they perceive as unethical business practices to protect the public.