So you have 25k to play with right now, not 40k.

I'm also finding that a single large repair can wipe out a whole year of income, making me wonder if cheaper cashflowing properties is the right play. 

I guess I always played it safe because of the security blanket it offered me.

I'm really interested in see how the "Local Agent in Charge" plays out and if they really do go after agents / brokers if the property owners do not comply. 

EvanThankfully I am 100% up to speed and educated now from learning from this person.I cannot believe how lucky I must have been over the past few years with my investments- its like literally flipping a coin 600+ times and was able to call the right one 95%+ of the time - I am just THAT lucky - I may go play mega millions. 

What role does being named "Additional Insured" play within the context of a Lender?

Bonus that the rents are higher than the lower comps you pulled (double check because tenants shop around, so may be your comps were not equivalent). 

And on top of that, I’d be paying rent or a mortgage somewhere else.I understand real estate is a long-term investment and that appreciation and equity plays a role, but losing money month after month, even post-move-out, is hard to justify.

If she wants to play in small claims court and waste everyone's time you can't stop her.

Quote from @Alex Todd: @Basit Siddiqi and @Sean Graham let’s play this out a bit for discussions sake.$3M MF property, depreciation and mortgage interest are ~$180,000.