However, i dont want him to be able to sue me for "the water heater isnt working" "the ac isnt working etc..."

Based upon my research findings I might also start thinking hard about that heater.

And I will state different jurisdictions have different rules, processes, expectations, etc.In my area you are required to have a permit to swap a water heater.

For bookkeeping purposes, I recommend designating a separate bank account exclusive to the house hack activities to keep some sanity.

Paying off the mortgage can provide peace of mind and simplify retirement, while keeping the debt allows you to leverage your funds for higher returns through investments.

Hi @Nicholas L. and @Chris Seveney a few weeks after my post, they did a part 2 for the survey and 2 days ago, the Zoning Dept. emailed out an update for the proposed policies.Here's their message:"We want to keep you informed and share a preview of the proposed Short-Term Residential Rental Ordinance regulations and express our gratitude for your invaluable feedback and participation in Phase I and Phase II of the Alexandria Short-Term Residential Rental Study.

The other thing could be tracking what you have had come up on the last 5-10 projects after closing, i.e. the water heater was at the end of life when we bought the last 6 out of the last 10 properties.

You have a decent loan on the place that you won't be able to replace from a cashflow standpoint.So keep at it. 

The deferral is all on major capital expenditures, roofs, HVAC, Water heaters. 

While the heater issue adds extra stress, addressing it promptly will protect you from further fines and penalties.