If you're self-managing then it definitely will be beneficial to have multiple props in the same area.

How much liability overage do I need on multiple SFH,s with a net worth less than $1M?

I don't think 300k is enough to fund multiple project in the area I live so I was thinking of perhaps starting to get into this business by providing funding to flippers for the down payment normally required by HMLs. 

The way I operate with my household (and future rentals) is using multiple "micro savings" (--> MS), each with its own designation (e.g. yearly expenses / vacation expenses / general savings etc).

@Aaron Klatt This three story multi- family residence built in 1880 with 7 bedrooms offers lots of character with lots of windows for natural lighting, hardwood floors throughout, multiple fireplaces, built-in bookshelves and a covered wrapped porch!

The only downside to financing is that if there are multiple offers on a property, the bank will 9 times out of 10 go with a cash buyer who can close the quickest.Good luck!

If he put some skin in the game, would that make it better, or would this still be a low return considering the risk?

Everyone wants someone else to pay for everything that happens to them as if there are no such things as accidents and there will always be someone there to pick them up when they trip and skin their knee.

If based on multiple methods, still $20k below your purchase prices, then double check your cash flow calculations. 

They have already shown a recent history of not doing so (i.e. their mortgage).The double deposit is enticing because it increases skin in the game but I'd still rather have a highly qualified applicant at a lower price.