The ones who bought in good areas and used my contacts for handyman/repairs do great with cashflow+appreciation but some bought in rougher areas who try using 3rd party managers and the expenses eat into profits even just turnover costs are way under-estimated by most investors add in lower quality tenants and that 10%+ cashflow deal turns into 0%.

Evict them and eat the cost.

Don't eat out, bring your own lunch to work. 

I've used FAT for creative finance deals statewide going on 10+ years now.I've done deals in Maui, Oahu and the Big Island.

This set back will eat up two years profit.

People need to eat and pay rent.

The Mayor has stated that they are eating up the already limited housing options for poor & low-middle class citizens in the city.2.

Curious - what are the biggest things eating into your profit?

I can't decide if I want to pursue a lawsuit for them to turn water back on (and possibly lose) or if I want to eat the money for several months and hope there's water below me.

ITs going to depend on a lot of factors but just jumping into STR "around the country" (i.e. potentially very far from yourself) is going to be challenging - property management fees are going to eat up a lot and its hard to cash flow as it is with current rates/prices.Most people would start with LTRs as its generally good for the "first investment" to be more of a learning experience and chalking up a lot of mistakes - so keeping $ amounts low, leverage conservative and the investment as "vanilla" as possible is generally good advice