Some people are outright scamming.

I don't know for certain but I doubt Fair Housing regulations protect tenants that are lying in an attempt to scam the system.

How can I know if I’m being scammed or if this is a legitimate opportunity?

Everyone wants to be an investor, and unfortunately many will fall prey to scams or make bad property buying decisions.

@Lane Kawaokaevery turnkey provider is not out to scam OOS investors. i think buyer needs to do their own due dilligence since the down payment is coming out of their pocket. 

And with the advent of the INternet  and to a great degree what is talked about on BP and supported by folks like you, it has created a mass of newbie non educated in the ways of real estate and some down right crooks out there scamming the public.. its the bad apples that are spoiling the bunch.. the state is responding to complaints from sellers not from realtors... or the real estate industry..

As soon as I can get around to it, I will make a blog post about them and how to protect yourself from these scams.

Insurance companies are the biggest scams out there.

It talks about realtors getting caught up in short sale scams.

These things are mainly scams.