The main issue here is the insurance problem

I had 1 contractor come by today and quoted me a French drain system, as well as raising the basement floor up 6 inches, with 3 sump pump's for a price tag of $16K, not including the repairs to the walls. 

Ask them when they issue distributions (anything before the 15th of the month is a red flag), do they require reserves, how is maintenance charged, do you see copies of outside contractor bills, do they upcharge materials (PM's have LAR accounts with Lowes and often get 20% off), do they keep all late fees or just the management fee, what other fees do they charge (renewals, inspections, etc), where are tenant security deposits held, how are evictions handled and are you consulted before filing, what screenings do they run, what qualifications do they require from tenants, ask for a couple other owners to visit with for a reference. 

@Justin CollierNever had issues like this

if you're only borrowing it for 2 weeks in ONE calendar year, i don't see why it would be an issue?

With the Midwest there are also winter issues and hail damage from thunderstorms that we don't deal with in California.

What's the issue with taking losses on a Single Family Home? 

If so, that could cause issues on the back end - not a lot of lenders will let the wholesaler use their own title company due to hiding issues, etc.

Just want to make sure you linked the right person there?

Thanks for sharing link to other post.