Selling a property in the first 7ish years with a mortgage is not great because the strong majority of your mortgage payments are interest and the principal balance doesn't go down much. 

Lots of theft and destruction. 

I think it would give a major jumpstart to rentals for me even though the only money made is in equity.

So the likely hood of a buyer wanting a major component to be replaced should be rare.

However, I do get calls for major plumbing repairs, air conditioners, and hurricane damage - hence the need to factor in maintenance.

It wasn't anything major, but certainly some work.

For instance, if one’s net worth is $500K, and most of its tied up in real estate, would it be a good idea to keep the next investment at $100K or less (20% of total net worth) from a diversification standpoint to prevent from devastating loss in the event something majorly goes wrong with the property?

If all major components in the property are new (or recently replaced/upgraded) and you don't have to worry about them for a few years, then not as big of a deal and you can building up the rainy day fund.

Of course majority of lenders that provide VA loans does not have a time-frame on how long you have to occupy the home.

Last month I had major needing to evict tenants and do a major cleanup and fix several items after they trashed my place in less then 2 years.