For me personally, I only work with a handful of investors as they/we require more time and energy than the owner occupied buyer.

LLCs do offer you a measure of protection from claims but are not absolutely bullet proof.

We used to be a team full of youth, energy, and radiance until this one came along.

Good news: your screening process has screened them out.....Check your local rules (or with a professional), but if you did not run credit, I would not give them anything other than a polite "thanks for applying"...I would not reward this behavior with any more of your time or energy. 

Rather than tell the whole story, I'll give you the bullet points: Bought first rental property in 2014, have managed it on my own since.

I don't think you will be cash flowing much of anything when it comes to your home maintenance expenses, time and energy etc etc. 

(They can't provide insurance on any fines passed on to me in case my landlord gets fined by NYC for having illegal short term rentals in the building, so this is a risk I have to bear)Question is:1) Should I bite the bullet and take out the insurance policies on all of my units?

Do you and she really want to put your energies into taking people to court?

Either a bullet or a firecracker.

Not having a long commute allows you to save a lot of time and mental energy that you can then put into a side gig or getting up to date with real estate knowledge.With that in mind, I think house hacking by renting out a room in a single family house or condo type of situation should work well.