Most of my clients run their SFRs at a 25%-30% (excluding vacancy/credit loss) operating expense margin and most of the banks I deal with on their DSCR loans underwrite using 35%.

If you’re okay with moderate negative cash flow as a "forced savings plan," that’s fine, but I’d advise setting clear boundaries on how much loss you’re comfortable with per year.

I can afford the loss.

As for heat loss along the way why does it matter?

Engage with property managers for insights on rents, expenses, or off-market opportunities, and request financial documents like rent rolls and profit/loss statements from sellers’ agents as part of due diligence.

I can pursue a legal action against the tenant or Baselane, but this will cost me additional $2-3K in legal fees besides dealing with a loss of at least $5K of rent and damages caused.

Both careers would see a sharp short term income loss, but once i'm established the money i'll make ought to be comprable to my next year income.

As you note exiting any RE that does not have some appreciation of a significant amount over say a 5 to 10 year hold generally speaking is going to lead to a loss at sale.

Not only that, they sued and won on a theoretical loss not even a factual one as the plaintiffs sued stating IF they (a) they think the result would have been (b). 

You may just have to take the loss and move on.