Scenario 2: An investor owns two rental properties like the one above, but with only 40% equity in each (increasing slowly due to 30 year mortgages), and is currently barely breaking even.  

You as the buyer bare the responsibility. 

Actually, it's been tried and barely made a dent in the market. 

It seems like the bare minimum would be having them exclude neglect, unethical or illegal conduct.

There are properties that cash flow with high insurance costs and much needed structural rehab or rental volatility.There are also rock solid properties, not in flood zones that barely cash flow.

If you can barely handle 1 rough patch, it'll mean 2 will tap you out.

For investment properties, there is no way to put zero money down--20% down is the bare minimum.

If we moved out and rented the main house as-is, we'd barely break even or even potentially enter negative cashflow.That's why the idea of renting out the ADU for extra income sounds appealing.

I do sympathize but nope, not for me.we have a camera at each of our STR's, they are outside on the entry level so we know if our house is getting trespassed and/or if our elevator is getting abused, even that was a toss up for us but it is only that area and i barely can stand having it.

With the divided Congress that can barely keep the government funded, I have personally given up hope that it will pass.