Meanwhile he was pressing for me to provide TI, rent concessions, etc.

Set up a camera, catch him in the act, and press charges.

Every state is different as is every insurance company but being that you likely cannot 100% confirm that the loss occurred during the time the past owners policy was in effect you would be hard pressed to have such a claim covered.

As both @Dustin P. and @Doug McVinua have stated the communities around Chandler (Gilbert, Mesa, Queen Creek, San Tan, Tempe) are just as good from an investment perspective.There has been a lot of press concerning future job growth both in Tech and Manufacturing in the East Valley. 

If there is a pressing situation that requires you to sell to get the cash in your lifetime then it is doubtful that you will squawk at having to pay tax at that time.But if your tax is in the $120K range and you get to invest that for a net return including of depreciation benefit for say 8% then after 10 years you will have more than doubled that tax in return and compounded interest. 

Being a real estate agent on the side, or a wholesaler on the side, etc, rarely works out as those are jobs, not hobbies, and you'd be hard pressed to be competitive if you're only working a fraction of the hours a full-time agent would be, for example.I'm a fan of buy and hold, personally, and it's a great way to get your hands into a lot of aspects related to REI.

I just wanted to chime in on DSTs ... you will be hard pressed to find much online. 

Never had a complaint after they left.By the way I'm pressed how you handled the situation, well done.

I pressed her about why not putting the $12K on a credit card (as per @Christine Kankowski advice) to save that 100% that she is offering, and she prefers not to deal with credit cards.

In this market they would be hard pressed to find a better option.