There has to be some solid plan for getting a value-add from the investment for a no-money-down scenario to make sense. 

Pick a solid B-Class suburban area.

Lots of great local groups around, each with pros and cons:TRIG: meetups once/month, paid membership, tons of local rooted investorshttps://www.trigofva.com/Hampton Roads Landlord Associtaionhttps://www.meetup.com/HRLandl...

We are living in the main front house and renting out the ADU to a tenant.My question is, other than having landlord insurance on the ADU, a solid lease agreement, and a 3rd party management company as intermediary to help manage repair needs/requests (my partner and I both work full time jobs) and showings when the unit is vacant, is there any legal entity protection or other avenue that will protect us further in case of a tenant lawsuit? 

Rental income has been solid Lessons learned?

(This one is crucial, a company that has a solid check and balance process is much more likely to maintain quality.)

@Jim Pfeifer that’s a really solid strategy!

I agree, it's a really solid place.

We are projecting a solid 8% pref and over a 15% IRR for our investors in this solid deal.

So if we are looking for root causes to the issues the O.P. is having my first questions would be What is your property managers screening criteria?