This photo is before pressure washing, we are trying solvents to remove the stains.

The reality that neither view is realistic or probable.The best advice I can give would be to underwrite for long-term leases as that can be an acceptable exit strategy, but be prepared to execute well on your MTR strategy (great interior design along with profesisonal photos and concierge servive). 

Also the inspection photos show some of the roof joists look like they're partially cracked.   

I have photos to document these issues.

I've tried everything and done everything "right" according to what everyone says (professional photos, changing rates, premier host, updating listing frequently)...well this was a surprise..."

.#2 Repair Management, tracking expenses, following up with outstanding work orders, ensuring work completed with photos by vendors, notifying owners when there is a repair request by the tenant and track the time it takes from work order to completion, track the amount of repairs to a home at end of year so owner can see those expenses and try to get them on service contracts and off home warranties.

Listing photos can often hide the true condition of the lot of things.Second is like Alecia noted: locals MIGHT know that the area is only going to attract subpar tenants.  

Non Premier hosts, same minimum restrictions, crap photos, mediocre reviews and yet that are on page one.

We took photos, made videos, and were told that they generally do not pay for electronics like TV's, electronic ice makers, and Air Conditioners since it is hard to prove who did the damage or when it was done.

Document everything with photos and/or video.