With good management you can avoid liability, just don't be negligent in your responsibilities.Now, this can change if you have other ventures that carry higher risks, those should be in some kind of entity.

Sqft difference between the two is negligible. 

You would need to establish that the seller either intentionally, or negligently failed to disclose a "material" fact.

(Going the FHA route gives you negligible negotiating power, right?

But it does not cover negligence.

Negligence is costly. 

. #2 I feel paying someone else's mortgage is a lot of pressure and could get someone else in trouble for any accidental negligence.

This particular tenant said PMC that they are breaking lease because of PM negligence.

Most of the time it's safe to rent to a military person or family but there are many military people who have never rented a home before or will cause some damage due to negligence or inexperience.Obviously military people can move between units, even on the same post, but it helps to at least have a starting point.

The other 80% were from negligent investors from the early 2000s RE boom.