The biggest risk is the risk of death or injury.  

I had an auto accident almost 4 years ago, and sustained horrific brain, jaw, eyes, head and spine injuries, and I am 72. 

Nonetheless, you should form a corporate vehicle to hold your real estate investments in order to protect yourself not only from personal injury liability, but also to keep these investments out of reach from creditors, judgments, etc.

@Brandon Hall @Kenneth Reimer @Chris Eaker It's part of work injury settlement.

To add insult to injury, since the GC absconded with her money, my guess is that the "GC" was not licensed, and therefore doubtful the necessary permits were pulled which will make the next GC and rehabbers job more difficult - and expensive.I would highly suggest she sell the property now to cut her losses - if the ARV is correct.  

Owner agrees to pay Rental Manager’s attorney's fees related to Rental Manager’s management of the herein-described property and any liability for injury on or about the property which may be suffered by any employee, tenant or guest upon the property.

However, there is an out in the law that does not require sole proprietors or owners of a contractor to carry workers comp if they have no employees and can instead opt to pay for his own injuries.

Contractor agrees to indemnify, defend and hold harmless _______LLC and its owners and agents from any injuries or losses that occur while working on owner's property, including damage contractor may cause to others.5. 

There were no injuries and there was moderate fire damage to one unit and moderate water damage to 3 units.  

That would be fine for us, barring any major illnesses or injuries. and honestly even if there was a major illness/injury we could probably negotiate a better rate than any insurance company.