The property in question has been carefully evaluated for its potential return on investment, and I believe it presents a unique opportunity for profit.

Definitely a unique market, I love it!

Things like:- having them name you as an additional insured- having their policy be Primary and Non-contributory- Requiring that their policy provide 30 day notice of cancellation- Having their policy waive subrogationThe Tenant should have General Liability, Professioanal Liability, Workers Compensation, Business Auto, and possibly Accident/medical coverage.

Along with my 2 business partners I buy & build small micro-resorts and unique vacation rentals across the Appalachian region.

It took a year and a half and a lot of work, as well as significantly more dollars than I was insured for.We had a slip and fall medical claim a few years ago that resulted in a settlement of over $200,000.

Maybe they want a large down payment for medical needs but are already so financially comfortable that they'll do an interest only at 5% for the first two years. 

I think some of your exit strategies could be to reposition and add some unique features to your rental to attract more renters and potentially drive a higher price, 1031 exchange and move it to a different area or even market.

Your profile and post mentions Philadelphia and New Jersey.There are unique tax implications between those who live and work in another states as there is a reciprocal agreement between the two states.

If your market is showing SF zoned comps for a ADU addition that match or exceed hands off cost of adding a ground up single ADU, your market would be rare if not unique for CA. 

While it can be very lucrative, it comes with its own set of unique challenges.