Discounting blatantly obvious tax evasion, I am convinced it's simply numbers game, as there appears to be absolutely no logic attached to the decision to audit. 

Unless you are going to dominate SEO and have your rental's website appear on the top of Google searches, your best bet is to use one of the above sites. 

The name will then appear at the bottom of the text box.  

Your friends could just leave the tenants the way there are as a property already 2/3 rented might appear more attractive to the next buyer.But to accomplish what you want, serving notice to the tenant violating the occupancy limit and filing for eviction if they do not comply sounds like a good start.  

Or I suppose you could buy one of those fake CCTV cameras and put it up in the laundry room for $39 to appear like the room is being monitored...would feel pretty "watched" cheating the laundry.

So it appears that either we will have to take an individual policy on the property, or find a company that will write umbrella policy that allows vacant properties (I don't think this is an option).

It appears to have at least gotten your brain thinking about the possibilities!

It appears that a lot of Realtors flood the boards with property and make it very hard for the FSBO deals to stand out since only 100 listings show per page.

The tenant claims "the men appear unfriendly" and thinks they may be " up to something."

.- Large closets - walk in is even better- 2+ bathrooms - New carpet- Modern appearance (paint, flooring, light fixtures, etc)- Garage ideal but if not a garage then off street parking- Cleanliness and overall good repair.