I had one tenant destroy it, and after I fixed it up the next tenant (also a friend) decided that they didn't need to pay me at all. 

Cap/ex ends up destroying your net income if any is even left after management bills out. 

I don't think I would want to be rehabbing by myself at 2am if the neighborhood was bad, or see my hard work destroyed.

In lower priced Midwest markets, repairs can destroy cashflow. 

A $20k property *anywhere* is either totally destroyed or in a war zone (yes, I'm using the term) that no one would touch with a 10 foot pole;3.

There are some BP folks that will be leveraged and if nationwide eviction holds occur long term can be destroyed.

Nothing destroys mortgage wealth like a two year court case, where lender is paying the R.E. taxes.   

Generally, the only time a building is required to get a Certificate Of Occupancy is when a new building is constructed, when an existing building is converted from commercial to residential and maybe after an existing residential building has been deemed to be unsafe by a government agency after the building is destroyed by an earthquake, fire, flood, chemical spill, or sewer waste spill.

In many of these states taxes are high, which will destroy your profits if you have a vacancy.  

The HALA upzone that just occurred is going to destroy single family homes in the city, as is the proposed change limiting new homes to less than 2500sq ft; seattle is pro homeless and anti family now.Per your comment on the area around the Duwamish, it is insane that the city won’t upzone Sodo.