For a particular system, based on number of items, type of distress, and condition, you will get a red, yellow, or green, or in more sophisticated software, like all different shades of these colors.  

A PM holding security deposits and collecting rents for 10 or 20 properties could be using your money to cover payroll or other expenses. 

I would rather employ this person full time on my payroll.  

I get that the average investor is more sophisticated, but aren’t there a lot of experiences where say the owner dies and leaves the property to kids who aren’t sophisticated?

Folks who have scaled stuff up always need bird dogs because it's the least sophisticated thing for an investor to do with their time, and yet, one can't hire a foreign personal assistant to actually drive around and research stuff. 

It required them to keep employees on payroll.

I am currently paying the 401K money back thru payroll deduction over 5 years from a very stable regular job.

It also requires gaining a level of sophistication and knowledge that not everyone has the time, inclination or ability to do.

In commercial or large sophisticated projects exclusions and extras are a common method of getting the best pricing.

The times that I have used Hard Money, the lender was pretty sophisticated.