(I own 150+ homes) It's the water running down the exterior walls that does the most damage over time.  

We stopped renting our carts due to liability and damage its not a matter of if but when you will have a liability issue and damage for us the risk doesn't outweigh the reward(s)

At the end of the day, every possible legal action I can proceed may just lead to eviction which is 8K plus 6 months of no rent and time which is ~20K in my case (not including any potential trash/damage they may leave to the unit). 

I painted it, redid the floors, put on new doors and hardware, fixed all the existing issues (leaks in roof, toilets not working, sinks leaking, water damage on exterior and upgraded the panel to a 220V) What was the outcome?

In that configuration there is some key elements, namely access, utilities and layout.  

Their investigation group will do a good job in ferreting out any impropriety(ies) and New Western's E & O insurance will pay damages if their insured (NW) is in the wrong.Notwithstanding, to do business with them as a buyer, you have to agree to and sign their disclosures. 

So, there is a set time so that tenants can sue to get it back plus additional damages.

There is significant water damage in the kitchen and also mold (possibly from over time, but not sure).

One roof was storm damage and covered by insurance.

.- Insurance companies do not typically cover termite damage unless the damage is so severe that it causes a floor/ceiling to collapse.