Paid-in-full properties are also targets for lawsuits.  

However after taking over the solar panel loan, the solar company told us that because of a lawsuit with the previous seller, the solar company had nothing to do with the existing solar panel on the house.

It's always best to put everything in writing so that there are no misunderstanding that lead to a lawsuit.  

So instead I focused on larger homes with a “mother-in-law suite”.

If you're not able to get multifamily, I'd suggest a single-family home that has a mother-in-law suite or something that you could easily create a separate entrance. 

where to start... contractor walked out on project, had to move in to property to cut costs on renovations, lawsuit against contractor, and many more Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

@Jay HinrichsI recently saw some assets originated in last 24-36 months that were performing but the originator has class action lawsuits pending against them in the state for predatory lending.

Not only that, it likely cashflows better and is less of a target for lawsuits.

For an LP to be filed, and be legitimate, there has to be an underlying law suit filed.

I'm not suggesting that you not look into ALF, but recent events has really ripped the roof off (literally) on the business model and difficulty for owners and managers providing for residents AND the resulting law suits that will follow when bad things happen.It would be my guess that business E&O, liability insurance will reflect these newly visible realities.