We filed a claim immediately but was denied because the water damage stemmed from "shallow groundwater" infiltrating the slab then walls.

As I said before, these aint our grandpas immigrants by any stretch.Back to the topic..it will be interesting to watch this crazy election year and see what is done to stem the flow (if anything) and take care of those who are already here.....people gotta sleep somewhere, right?

Questions:Is it 1" lower at the exterior stem wall, or at the interior? 

The scarcity of these properties stems from high demand, limited supply, and fierce competition, especially from experienced investors grabbing good deals swiftly.

Its not ideal but it can stem the bleeding in your bank account. 

It does not matter what the pictures show on the outside of the stem wall.

Like a lot of things real estate over the last few years, there are a lot of people that leaped in without any real knowledge or plan, and they are not doing well.You are also right that a well located property with all the required work needed to differentiate yourself will yield a solid return.There are certainly headwinds that stem from the popularity of these STRs: as you note, more jurisdictions are changing their laws and/or requiring more from hosts.  

My question mostly stems from from those research gaps I currently have. 

Wait till tomorrow"What you say above reminds of this quote also:“All of humanity's problems stem from man's inability to sit quietly in a room alone.”― Blaise PascalMeditation saved me and made me calmer, controlled and more empathetic.

That may stem from my "early in my career"  occasions when I had sellers who went missing.