However, a simple security system would deter this.Personal Safety -  I assume you are using their ID to run a background check and deciding if their history affects your safety, correct?

Even the best property management companies (PMC) struggle with:- Finding reliable handyman and contractors (ServiceTechs)- Same with affordable ones- Tracking preventive maintenance- Tracking previous work for potential reoccurrence warranty coverage- Understanding tenant reported problems, so the correct ServiceTech can be dispatched- Determining if tenant is at fault for an issue & should be charged - and will proof stand up in court?

If he kept the house, then your statement would be correct, because there is no immediate taxation of insurance payout.

And you are correct it was a house hack.  

If I'm understanding correctly, Deal Machine also provides cash buyer data feeds??

I stand corrected.

If my crystal ball is correct, we are going to see a lot of these sub2 deals hit the fan in the next 36 months. 

Though many investors bend the rules and possibly don't get caught, you have the financial situation to do it correctly.

if they were that great you'd never see them because they'd all get bought up before they even came to you.I think what @Travis Biziorek is saying is correct - you need a strong network to be successful. 

There is way more things that can be covered and any attorney can correct me on here, but these are the ways we understand how to make it work.