We have bought in AZ, NV and TN and have had no issues since we have good property managers.

I have however run into issues like transfers being rejected by Baseline (from one of my own accounts in a traditional bank) when all the information is correct.

Your biggest risk if you execute the plan will be running out of money in retirement, either due to natural longevity and/or later health issues draining your resources.  

So you're essentially saying the roofer has no negative consequences for his bad, the city inspector doesn't have an negative consequences...and you have to pay someone to fix this issue?

Both apartments are currently rented, would this be an issue in the future to get tenants?

@Mai Nguyen, no legal issue, it probably does not make sense to do. 1.

A referee deed will be issued and the most debts on the property will be wiped out.

Yes getting a report from the plumber would be ideal; however, I believe your issue will be no one knew that an open window would cause the pipes to explode. had you given them a notification the first time when it happened then you could say "Hey I explained to you this would happen" or have it written in the lease agreement.

I bought a house last year after inspection A general Inspection report showed everything is ok with the plumbing. nothing came up. last month I had some warer backout issue coming up from the bath in the basement, ordered a plumber. 

She's been there this entire time and i've had no issues; win-win-win!!!