In general, when the landlord's property causes damage to tenant's property, the landlord is liable, unless there is proof that the cause of the water leak was the tenant (unlikely I presume).

While I’m not personally the pot police if there were actual police reports regarding this or if I saw proof of it at the property I would immediately begin terminating the lease.

Evidence may include:two months consecutive bank statements or electronic transfers of rental payments for existing lease agreements, orcopies of the security deposit and first month's rent check with proof of deposit for newly executed agreements.See Treatment of the Income (or Loss) below for further instructions.

I'd be surprised if there is a sustainable builder in Texas that I have not at least talked to, if I don't actually know them.I am trying to develop projects that allow these folks to showcase their work so people may discover that they can live in healthy, efficient, comfortable, forever homes that don't burn,  and are insect proof and mold free. 

If you have the proper legal documents in place and a strong tenant vetting process you can avoid much of the risk, though it's never fool proof, even with a PM. 

Unfortunately only about 5 applications have been fully submitted and all of them have failed to show proof that they can afford to pay the rent and provide the proper references.

I can't know this for certain, of course.Not sure if this is worth pursuing with a lawyer or chalking this up to a lesson learned (be very careful buying properties in a wet area with finished basements, ensure it is suitably water-proofed).

You can use delayed financing or show proof of rehab. 

But maybe it would be easier to raise less capital and have more proof of the market potential.

This is proof of what they are actually paying and the current owners are not fluffing the books to make the assets more valuable.