Are they doing everything possible to expose properties to the broadest possible market?

Being a realtor has also exposed to me to so many smart and interesting people so I fully agree with your positive #4.

In this type of scenario how to come out of this kind of loss giving deal.Note: The Mold would not have exposed in the inspection report.

But I might just be exposing my own biases here.  

Liability: The downside is that owning property personally exposes you to more risk.

This approach allows for pursuing equity-like returns without exposing investors to equity-like risks.

Are they doing everything possible to expose properties to the broadest possible market?

NY times did an expose on insurance company losses that should make you worry. https://www.nytimes.com/interactive/2024/05/13/climate/home-...

Why not put an extra 2% commission on top and get the property exposed to all of the qualified buyers in the market ( the MLS).#3 Marketing - They will get professional photos done, marketing, open houses, etc. to further expose your property to buyers. 

You also risk:1) Committing mortgage fraud by misrepresenting the property and/or how you're using it.2) Exposing yourself to liability if the 3rd renter discovers they are in an illegal unit.3) Voiding your insurance.