I understand you are very conservative with debt, but having so much equity in these deals has ruined your returns.

But typically the seller can't afford or just doesn't want the house anymore and they're ready to walk way but they don't want their credit ruined by a foreclosure.

Oh God, too precious.We moved her into a different vacant apartment, and she convinced the owner to buy her a new carpet, because the old one was supposedly ruined by dry plaster dust.  

What is my right as that was brand new and completely ruined due to tenants negligence?

If you buy a nice investment, a bad manager can ruin it.

I soon realized it was because he bullies everyone into believing he will ruin them within the small, close-knit community.

Almost 100% it is because of one of two reasons: either the door gets broken and the tenant tosses it out rather than letting us know, or they take them off so they can use the closet without the doors (such as a nook office) and then put the door somewhere where it gets ruined (outside is popular, in the rain) or gets nabbed by hobos cruising neighborhoods looking for things to steal. 

If you are okay with someone painting over your original woodwork (even though the lease says they can't) or ruining your marble countertops when they dye their hair (true stories) then you may be emotionally hardened enough to rent your original home that you have lovingly designed.Consider, also that at times you will have to carry two large mortgage payments and decide if you are willing to do that.

This is how new investors ruin their reputations before they even have one. 

Of course there is a line that separates legal business from criminal enterprise, but the line is not drawn where you draw it, by alleging and asserting that a businessman must act against his own interests and make idiotic decisions aimed to ruin his own business.All above said, I am not an evil or malicious person.