Yes you need these in a decent STR property. 

If you have one vacancy in a fourplex, it is only 25% vacant.With that said, people are killing it in the single family space and specialty property.

You are an extremely rare breed in being willing to discuss a sponsor in a negatively light publicly. 

And are potential guests interested in staying at a STR in a basement that can have occasional squeaky floors from time to time?

Not many would risk everything they own if that was a requirement of investing in a business. if you’re referring to FRAUD”, then the individual committing said fraud can be sued individually, and  can not claim remote entity protection since they and not the entity, or they in addition to the entity are guilty of fraud.  

You could use the equity from the sale to get back on track financially and reinvest in a more manageable property to kickstart your investing journey.

I invested in a syndication, but it was with an investor that had a long track record.

I’ve personally house hacked in the Irving park neighborhood in Chicago with a multifamily so not completely relatable experience to what you’re looking to do but hopefully can provide a few insights.If you go with the suburbs in a SFH, you could rent by the room and presumably increase cash flow.

But for me I'd rather be in a growth area than a declining area, but thats just me.

Especially in a case where an umbrella policy wouldn’t have served the same purpose.