With minimal expenses, I netted $3500 in cash flow for the year.Investment Strategy: This was an appreciation play, I could cover if it went wrong.

I never was involved with much of my dads work growing up, so I'm starting from a point of minimal knowledge.  

Of course, you can definitely prevent this (or minimize the risk as much as possible) by having appropriate screening in place.So it sort of sounds like there would be no incentive to an owner to replace section 8 tenants. 

If the lender wanted to sell their loan, they would have to take a loss because of this defect.There are lots of schemes and ideas on how to avoid or minimize the risk that a lender (especially, the big banks) will follow through with calling a loan due because of violation of a "due on sale" clause.

I don't have much saved up (6k) and I have good credit (700+) with minimal/manageable debt.

But like many successful investors will tell you, you get wealthy not from your winners, but my minimizing your losses. 

The goal is to minimize the turbulence they feel.

I plan on minimizing this by getting multiple quotes when large jobs are needed. 

In addition, those rentals were with 10 y.fixed, so cashflowed minimally.

My attorney has just confirmed only the small liens will carry over which is minimal compared to property value.