There will be no less than 2-3 thefts during the remodel.

Compare cash flow of a property with no mortgage to an identical property with identical rent and expenses but with a hypothetical zero percent mortgage; the principal payment reduces the spendable cash flow. 

And a new identity for YOU as an investor. 

I *have* had tenants who said there would be no problems on a criminal background report, then I run it and find, among other things, domestic abuse, theft charges, child endangerment, etc.

They dont protect against theft or injuries.Is that pretty common?  

Yes we use APIA and they have insurance for vacant homes builders risk policies that protect against forces of nature but also cover theft and vandalism.

At this point I'm considering filing felony theft charges against him along with the civil suit and complaint to the Home Improvement Commission.

Hence, if you are not seeing credible opportunities on a regular basis, you need to refine your activities, such as identity building, marketing collateral, outreach rituals, peer connections, conference attendance, seller communication, etc.

Property 2 will likely qualify for a slightly better mortgage rate due to the type of financing, but for the sake of argument I'd like to compare them with identical financing.

The two properties are also nearly identical in look and unit type (same developer) so instead of advertising separately we combined the budget of both and got a higher level of advertising on Apartments.com.