If you are not you need to save more money. 20K will not go very far on a property fi you are not going to live in it. 

It might save them time scrolling through listings.

The only defense is saving, reserves, and insurance. 

It is difficult to recapture the electrical savings from the tenants. 

Low income neighborhood; save on taxes How did you find this deal and how did you negotiate it?

Of course, there is very literally entities out there who make there living via filling frivolous lawsuits than offering settlements at cost savings vs one fighting to prove innocence, and they target those "marks" based on such searches.     

The biggest ways IMO are MLS data, multiple solutions for sellers (off market cash deal or listing), ability to rep. yourself on your own deals (saving on commission).Commission savings adds up fast when you're doing multiple deals a year.That being said, there is cost to having a license so if you're only doing a couple deals a year then it might not make as much sense.

@Greg Hammond not paying capital gains is enticing for sure, but you’re only saving $40k.

Now, if for whatever reason this was a fair allocation, and the 5-yr property indeed lost 90% of its value while in our hands - then the impressive tax savings they boasted about would be valid as well. 

Some purchase agreements include clauses that allow you to resolve disputes like this through mediation or arbitration.