As you mentioned, many people have been originating loans for decades and not following any of the rules, just letting it rip like its still 1980 or something...

New furniture, coat of paint, and some minor rehab to the decking.

I've also launched a residential real estate painting company.

We asked the owner if we could start painting the house before the closing date...

To remedy that, the carpets should be ripped up and sealant applied to the subfloor, at minimum.There are also tiles in the smaller upstairs bathroom that are lifting up and creating a safety hazard; putting a rug on top is not a sufficient solution.The house is in a condition that materially interferes with the health of household members.

A tall fence, tree, exterior paint can control a lot of things your guest see during their stay.

Assuming you have 3,000 sqft just paint and carpet can cost you 25k or more.

LL would have no incentive to paint, update flooring, etc.  

Not that I don’t enjoy dealing with tenants, maintenance, lawn care, Home Depot and Lowe’s trips and tenant change overs (I recently put new carpets, kitchen floor, appliances, vanity and mirror in the bathroom and fresh paint in my upstairs unit).

So if there is a fire due to natural cause, HOA insurance will cover the cost of exterior repair like painting the exterior walls.