You can also JV your way into a different area too2) If you're uncertain about the tenants in a certain area make sure that you're reserves support a longer vacancy period and look for a vacant property, once you acquire the vacant property create a stringent screening process for your tenants to help mitigate risk (you may want to partner with a property manager or another REI in the area for best practices) A stringent screening process is a great way to decrease your chances of tenant issues in the future (also partner with a lawyer to make sure that your lease is explicit in detailing the standards for your property)

Now local owner operators can largely mitigate this..  

I was able to do this because our business is vertically integrated (so our cost of construction is lower than what other investors get), I have budgeted (and over-budgeted) for every possible risks and have contingency & mitigation plans (I am an electrical engineer by background so I am very risk-averse and conservative in my underwriting).Who Have I Modeled My Acquisition Strategy After?

Build my money enough to where I can buy the houses with cash and pay for the repairs, mitigating my risks and holding costs. 

Obviously, once we're through the permitting stage and have all of our approvals, then most of the risk has been mitigated.  

to mitigate risks and you should be fine.

Mitigation will be done.  

You can mitigate your risk by providing a utility allowance, but that means you have to follow-up with the tenant each month if they exceed your limit.The only caveat I can think of is that some landlords have no choice if there is a duplex, for example, and common utilities.  

Other than that, mitigate your own risk by educating yourself! 

I know we will get them eventually but how do you mitigate them as much as possible?