Your looking at this really cool and unique position your in, and focusing on it as a problem. 

He used to troll these waters for suckers very hard until I found out that his claimed experience and transaction history was fake.

In davidson county most people book an STR to be close to downtown or at least close to somewhere cool as a secondary priority (like 5 points or 12 south for example).If you have an STR in white house it's going to need to make up for location.

If they are the one providing most of the cash, they might not want to carry that liability, but you've already negotiated with your partners on this and then the bank isn't cool with it, you could be in a pickle.

However, i dont want him to be able to sue me for "the water heater isnt working" "the ac isnt working etc..."

The tenant understands that the property of the Tenant is not insured by the landlord for damage or loss of any kind (action of third party, fire, water, theft, vandalism, storm, heat or cold, electrical damage, pests, mold, accident, etc.), and the Landlord assumes no liability for such loss.

The water fell 3 floors, when I observed the incident my neighbor was attempting the sweep water out the back door.   

For example, I have a subject property that has 1682 SF on the main floor and 810 SF of finished basement (the majority of which is about 8 feet in height with the exception of some bulkheads to hide the mechanicals) and 271 of semi-finished basement that is a utility room basically (washer/dryer, freezer, hot water heater, furnace, some storage).

@Matt 'Roar' Gardner Cool, thanks again for the info!

I think our cooler climate and fresh water resources are going to attract a lot of population in coming years, especially as CA/FL become impossibly expensive for many people.