Should you get poison ivy outbreak on your skin, a hairdryer will be your best friend. 

Things can go wrong with high-end properties too, but it's all about risk mitigation.

The landlord also has a responsibility to do their best to find another room mate to mitigate the remaining individual/s's loss. 

On one of my California properties.. turns out we have some pretty valuable Tiger salamander habitatdepending on the study we do... mitigation is between 165k to 195k per acre with 1 to 1 and up to 3 to 1 offsets.so 165k and acre to potential of just under 600k per acre to mitigate these guys.. cash to the govmit.and this is just one thing that needs to be addressed... usually the whole property is not affected but a neighbors property is 10 acres and 1 acre is affected depends on 1 to 1 or 3 to 1...now our property is worth 1 million an acre as development ground.  

Rising interest rates will also put pressure on cap rates.Most prudent investors are adding value and purchasing properties that cash flow in good locations to mitigate risk. 

I didn't inquire into the details, but it would be my guess (given that particular state) that the owner was also sued.In my case, one of the reasons I have a property manager is risk mitigation (beyond wanting nothing to do with the day to day hand holding of tenants).

There are separate ways to mitigate risk with development and that is a topic for another post. 

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

And that they did tell you that the issue of intent could be mitigated by using the safe harbor of 2008-16. 

This has been a consideration anyways to mitigate risk.Long story short, the listing didn't include that there were tenants in place.