After nearly three decades of probates and many, many hundreds (thousands?) 

You expect a return on your expenses of changing out cabinets and countertops, municipalities must expect the same thing, the tax base must justify serving that area at a break even point.

Anyhow, here is the information I got from the company that does the insurance for my HOA:Unit Owners would purchase an HO6 policy (condominium unit owners) which will insure the cabinets,appliances, wall coverings,floor coverings as well as the unit owners personal possessions.The Association insures the buildings, drywall out.So it is my understanding the HOA will cover the roof and the exterior.

It's not the number of deals done either, doing a hundred sub2s doesn't make you an expert as you can do them unlawfully or haphazardly 90 times and not have had an issue.....yet.

Nobody in LA can build that cheap, or the finish needs to be ripped and changed by the new owner. 110/sf is for town houses that everyone  wants to rip out the cabinets to put their home depot stock on. 70-90/sf on soft costs, and 150/sf on land (say a 1200 sf is 180k). 

With the type of profit I figured (about 20k annually) I just don't see the downfall other than the 'headache' that goes along with it.Thanks Jennifer,Thanks for your reply and question.Although I don't know the area you mentioned I have had experience with hundreds of deals in lower class areas (mostly SFH).It was difficult enough managing and collecting rents in these SFH and I couldn't even imagine what it would be like managing a multifamily in such an area.I have personally never owned such a property so I can't speak with full confidence but I can say that I have witnessed many similar complexes become revolving doors over and over again.Investors get attracted to the cashflow potential but end up loosing 6-12 months down the track.

Yes we do have hundreds of overseas investors and we understand their needs.  

And when the investor has a large portfolio they can't have hundreds of loans out with banks right ?

Local info like quality of neighborhood and schools will matter a hundred times more. 

These have been done for more than fifty years, some over a hundred years.