The VA loan that gets assumed by a non vet binds the entitlement to the original borrower and if that new borrower defaults, the original borrower loses that amount of their entitlement forever. 

Without giving tenants this notice they are included in the protections by default.  

But, could I minimize risk of renter defaulting on payments for the 2nd property by turning this property into a section 8 housing unit with guaranteed income from the gov't?

IE the owner has received their 4 week Notice Of Default with the auction some day of week in 4 weeks.   

I would love to hear your thoughts on the pros/ cons/ risks involvedYour comment: "Buyer and Seller enter into an agreement through an LLC which allows them both to be on title"Your comment: "Being on title protects the seller from the buyer defaulting"That isn't how things work.

In my local MLS, it may not be true in your area, there is a field that a listing agent can fill out to designate the home they are selling has a FHA, VA or USDA loan which by default would make it assumable.You can also reach out to your favorite local title company and ask if they can provide you with a search tool like TitlePro247 or provide you with a list of current on the market homes with a FHA, VA or USDA loan in place. 

I see on a day to day basis how landlords mishandle tenant default situations.

Default by TenantTenant will be in default (Default) if: (i) Tenant fails to pay any Monthly Rent by 7 days after Monthly Rent is due and does not cure the failure within 7 days of receiving written notice from Landlord; (ii) Tenant fails to pay any Additional Rent by 7 days after the Additional Rent is due and does not cure the failure within 7 days of receiving written notice from Landlord or; (iii) Tenant fails to comply with any other obligation or restriction in this Lease and does not cure the failure within 7 days of receiving written notice from Landlord.

I've tried to "help" by letting tenants in default get out of eviction and leave voluntarily and got left with trashed properties on multiple occassions.If your criteria says to deny an applicant. stick to the facts.

I did find something interesting at https://ag.ny.gov/sites/default/files/source_of_income_discr..."