Lawyers may have to be involved, thus delaying and complicating the process, however, as long as nothing was done with intent of causing whatever caused the claim, they'll cover it.

There are opportunities for various strategies here- short-term rentals, medium-term rentals, long term rentals, BRRRR, flips, etc. 

The most important thing is to develop a long-lasting relationship with any great Wholesaler Friendly Title Company.Goodluck

Can they prove how long it takes to rent a vacant property?

Renting short term or long term will have some bearing on it but this isn't too far fetched to find a lender for this sort of thing.A small, local lender will be your HIGHEST probability of success when trying to find investor friendly lenders on investment properties.

My primary goal is long term appreciation and I'll accept a property that breaks even on cash flow.

Long story short I’m acquiring the house with existing tenants.  

Flexibility with your rental requirements can go a long way. 

I'm exploring several long term strategies:-Exit:The townhouses share common walls in the middle.

.- You won't have to pay all of the fees associated with a new loan.I'd think long and hard before I buried $100k like that.