But these expenses are 100% necessary compared to a lawsuit that would subject my other 10 properties from any negligence from the 1 that may have an issue.  

If you want to see the chances, go to the prosecutions on the CFPB site, to your real estate commission, Google real estate scams and law suits in real estate.

Buying a house for 200 k and selling it for 1 million is not illegal as long you are not making false claims,it is sitting on a oil field,the city is going to buy it for 2 million As long as the person has the capacity to enter into a contract without ,mental illness, intimation etc it is perfectly legal.Poor judgment or sour grapes about a purchase can lend itself to lawsuits,but the fact is this is the way the market works .

Mother in law suites shrink your buyers pool - a great asset for someone that is looking for that specific feature  - a deterrent to the other 95% of folk that would prefer not to have it.

I can cite lawsuits in favor of plantiffs all day. 

If you've been in CA for any length of time, too, I'm sure that you are well aware of how lawsuit-happy a lot of people are to start with.The state is *so* tenant-friendly that that was one of the big reasons I chose to sell my house there when I left rather than rent it out.I'm not a lawyer but a person who once faced some real issues with a landlord making frequent unauthorized entry, among other things, so I had to learn the law very quickly.

The fee is not negotiableI suspect the management company doesn't want to get into a lawsuit.

If you are personally handling the property and do something found to be negligent an LLC will not prevent you from loosing a lawsuit.

The lawsuit followed the departure of nearly 30 Corcoran agents and accused them of taking trade secrets and client leads with them.

Mostly, we terminated their employment the day it was discovered and on occasion (when enough evidence was there not to cause a lawsuit to the company) we prosecuted the former employee.Again, this is not about me or my history.