You could cause yourself some exciting legal problems if the internet forms dont meet your state requirements.  

Now my insurance company (USAA) is telling me that they can't cover it because no one know the cause of loss.

That's cause by a bad install allowing moisture. 

Usually your ability to save money will cause your successability.  

Bank want 2 years tax returns, don't show a lot cause we own a lot of rental property, and my financials, which are fairly strong $2M net worth and 740 credit score, but a big black eye with a bankruptcy back in 2011 due to being over leveraged on rentals and the market crash.

the tenant is a good one and has been there for a long time and pays on time every month, doesn't cause any headaches and causes no problems. 

whos responsible if he performs a repair that starts a fire or causes some other damage?  

And you have already taken out a 20K loan out of a 50K home (assuming it's still worth 50K today cause you bought it from the 08), then you probably can get another 20K at best for you Fix&Flip.I would sell the property and use that capital to fix and flip house cause that business needs lots of cash.Also, I am surprised that your triplex gives you only $200-$250 positive cash flow, do you mean per unit?

The length of time owning the home, along with the hours invested, which caused me to miss time on other properties makes me feel like this is actually a loss.

I'm definitely open to all other advice as well, but am concerned about buying a property where I think I can rent out the MIL, but then hit some law that prevents me from doing so, or causes expensive alteration to meet MIL regulations.Thanks!