To mitigate this, masonry walls should have vertical expansion joints every 25 feet or so. 

Is this how you personally mitigate your risk or is this actually a requirement of lenders to handle it this way?  

Missing/incorrect paperwork is not uncommon and the agent can 'sell' the property to others while your offer sits on the loan mitigation officers desk (known as backup offers).Since this is a townhouse, your comps would be best from the same complex and if not, then the same layout in a similar complex.

I'm okay with that: I am living close to rent free in a property that, once the mortgage is paid, privides passive cash flow equal to half of what I am currently earning.Yes that is the basic idea.The big things (that can't be mitigated really) would be the taxes (Though Boston does have an owner occupant exemption that lowers them, not sure how they do that with a owner occupied multi) and insurance (Which should be cheaper as an owner occupant too) as well as maintenance and repairs.You also should have a buffer for capital reserves.

Yes, that can work with the right two people, it is not a guaranteed formula, but a good chance of success.As far as your original question, dong a larger number of smaller values flips does not mean you have reduced risk, all you have done for sure is diversified into a larger number of projects.To mitigate risk, you must buy correctly to allow for enough spread.

It is nice to see a solid cash flow deal and good for you for asking advice, it never hurts and actually allows you to mitigate risk.

If it were still possible to ask for first/last up front and other mitigations 600 would still be okay  (I never used to look at credit score at all)  today you can't make alternate verifications like that to see if your applicant has some level of financial stability.While I started out self managing,  In this day and age I would highly recommend considering hiring a local, experienced property management firm.   

Beyond the legalities of it (having criteria and applying evenly to all tenants), it will also be the way to create or mitigate a lot of headaches.

Even being W2 is a risk now that "job security" is an oxymoron.Both risk and difficult tenants come with the territory.Risk can be mitigated thru education.Tenant issues can be mitigated thru paying for a property manager.My $0.02 ...David J Dachtera"Success is not a destination.

I allocate a good chuck of my assets to direct investments of my own rather than through my developer contacts to help mitigate that risk (plus I want control).On a side note, when you have a windfall like this, you may want to reconsider your overall asset allocation and also what assets you hold in taxable versus non taxable accounts.