Was this just an anomaly or is this something we should expect and try to mitigate?

I would thank him for letting you know but in the words of Kevin Heart “you goin to learn today” and that is what deposits are for to mitigate risk.  

The first year cost seg looks like it'll mitigate our capital gains taxes so forgoing another purchase through 1031 would mostly be offset by the MF cost seg (payout of maybe $1k on $50k investment of 1031 funds).My questions to the brain trust are:1. 

Additionally, with the fire risk in my area we experience a significant number of mandatory power outages to mitigate fire risk, so those panels (plus the back up battery) actually added a significant amount of value to my home.

Many aspiring investors mitigate this by looking to other creative strategies even if its a house hack that they "live in" for one year then move it to a full rental. 

The building itself may not be an outstanding property, but the location should be.When an investor “buys location,” they have mitigated the investment risk substantially from the very beginning.

However the great thing about real estate is that over time, most mistakes can be mitigated through value adds, appreciation, and inflation.Good luck and reach out anytime!

After the repairs or rebuild is done you will receive the remaining balance.If you have not had a Fire & Water Damage Mitigation contractor (I recommend Belfor based on the work they have done for my clients) I would have one look at the property to see if there are any immediate needs (remove water damaged sheet rock, remove smoke damaged items, etc.) and communicate it with the Insurance Company. 

I recommend at the very least to show tenants how to mitigate major issues on their own until someone can get there to fix it.

It's not that hard to wander into a prohibited transaction and blow up the account.I'm of the opinion that it's generally more beneficial from a tax perspective to hold real estate outside of retirement accounts when we consider the long-term lifecycle and potential tax mitigation strategies.