In this scenario the buyer effectively pays you, and you then turn around and pay the bank. 

I have gotten reno projects for what is effectively a 98%+ discount via such.

We stopped renting our carts due to liability and damage its not a matter of if but when you will have a liability issue and damage for us the risk doesn't outweigh the reward(s)

At the end of the day, every possible legal action I can proceed may just lead to eviction which is 8K plus 6 months of no rent and time which is ~20K in my case (not including any potential trash/damage they may leave to the unit). 

I painted it, redid the floors, put on new doors and hardware, fixed all the existing issues (leaks in roof, toilets not working, sinks leaking, water damage on exterior and upgraded the panel to a 220V) What was the outcome?

I would agree with this - its probably too soon / not economical to do a cash-out refinance at this point - options for freeing up equity would probably be best served via HELOC or something to that effect

Storm damage should work the same way.

Their investigation group will do a good job in ferreting out any impropriety(ies) and New Western's E & O insurance will pay damages if their insured (NW) is in the wrong.Notwithstanding, to do business with them as a buyer, you have to agree to and sign their disclosures. 

So, there is a set time so that tenants can sue to get it back plus additional damages.

There is significant water damage in the kitchen and also mold (possibly from over time, but not sure).