We have unwrapped dozens and protected all from the DOS clause. 

How do I protect my investment as the loan amount is more than the replacement cost of the property?

Often, I have borrowers make an LLC during underwriting so they can protect themselves post-closing. 

Liability protection 2.

"for $___/year, we provide "x" additional inspections")6) Liability policy that covers tenant intentional damage, criminal acts, and unpaid rent when skipped or evicted (through insurance provider that provides this kind of coverage)7) Financial reports per quarter (as whatever period makes sense to you) (this can allow you to advise the owner on the health of their portfolio)8) End-of-year review of the property to show conditions and suggested needed and preventative maintenance items 9) Preferred vendor discounts (requires a contract with a vendor to give better pricing)10) Eviction protection programs (this is usually done "in house" when you have sufficient number of units under your management to be able to offer this kind of program)11) Legal services (requires agreement with landlord attorney to provide those services at set fees)12) Professional photos option (for enhanced listing)13) Professional, licensed home inspection (this is more relevant for older homes to ensure safety and habitability are addressed) 14) HVAC filter replacement program (this can also be a program offered to tenants)15) Pet and ESA screening through pet screening vendor (helps to streamline and increase quality of screening)16) Client portal account for ease of communication, updates, reports, etc.

If one location goes bad, flooded with poor drainage, fire outbreak, riots, weather related destruction etc, the other property is protected. 

But I don't know if that verbiage is enough to protect me in the event of a lawsuit for example if there's a fire down there and someone that is in fact sleeping down there gets hurt. 

We borrow from our commercial banks and put in the loan docs if we have  another serious down turn we can take whatever standing inventory we have and term it out as rentals for 5 years ( so some dooms day protection).

This protects you and your contractor.  

If we go with a 30 year fixed traditional loan, how do we get legal protection?