What are thoughts on building in a home warranty on your purchase to help with unforeseen issues into the first year? 

Be wary of the gross #'s and make sure you account for the unforeseen and typically unaccounted for expenses in those areas.

That being said there could obviously be unforeseen repairs etc. or tenant could do a number of things on the way out.I'm requiring an application fee and background check on all prospective tenants who are serious.

We've never had a tenant go to an attorney to draft a letter to us about quality of life and dissatisfaction about living in one of our properties.The best protection is to make sure you are always in compliance with landlord-tenant law and non-discrimination laws for your jurisdiction, follow the terms of the rental agreement, maintain habitable abodes, and do what you can to make sure there are no unaddressed hazards or safety issues.When unforeseen problems occur, such as the HVAC system breaking down, plumbing problems, pest invasion, etc... the minute you become aware of the problem, then do what you need to do to fix the problem in a timely manner.

Even If the property was in an LLC I would not like having a large sum of equity at risk from an unforeseen lawsuit. 

If you had $1 million dollars sitting in the bank right now - you would be ok buying a rental home for 100k knowing that you can go through any unforeseen storms... 

The risk with doing nothing is far greater than taking action assuming I have calculated the risks and ensure there are mitigated plans in place should something unforeseen happen.

The $7,500 commission for selling my own rehab on a $250K deal can make the difference in a profit or a loss if a rehab runs into unforeseen expenses or otherwise goes sideways.  

You can't "know" until you have a solid understanding of how the numbers work (surface) and how the potentially unforeseen/unknown factors (subsurface) impact those numbers.

When he ran across unforeseen issues, he texted me the picture and then called.