I am also ruthless with mitigating risk so I am just curious how investors think about risk and leverage in current environment.  I Imagine much of the vacancy risk is helped by a great property manager who finds quality tenants?

To make sure we had all our bases covered we called insurance, they sent a restoration crew out there to do full mitigation, cost $20,000 and my tenant was worried about mold etc.

Most vacation homes in the rest of the country just mitigate the mortgage when rented out. 

If you're fixing this to keep as a rental, I would only care about the things that were stopping me from making it a rental now, or could be so tremendously expensive or dangerous later that I would want to take steps to mitigate it now.

@Rick Reeder I agree with @Cameron Tope I think this proposal will see significant push back and if it is adjusted then CPAs, attorneys, asset managers, and real estate investors will have to explore other avenues to delay or mitigate that tax impact.  

I would either collect first and last month's rent, extra security deposit, something to mitigate the risk of a marginal applicant like that as well. 

If you can figure out how to mitigate that issue and then fix up the place, you can likely end up with a good house, for a good price and locked in at a 3% interest rate.Be creative and stick to it.

The reason that is currently the condition is due to multiple offers and the listing agent/seller being concerned about the appraisal coming in lower than purchase price, which is mitigated by seller asking for no appraisal contingencies and larger amounts of money in the bank. 

I think your mindset should be one of loss mitigation.  

Try to find ways to mitigate the damage and then move on.