We found dozens of unnecessary steps that we were able to cut out. 

Cut down on the damage by up charging another 100 to 200 bucks a month a get a good renter.

I've picked up a few books (The millionaire real estate investor, building wealth one house at a time, and Hold: how to find, buy and rent houses), but am only halfway through the millionaire real estate investor - I started last week, cut me some slack!

Its a daily pain in the *** dealing with those people.I'm not anywhere near where I was before the crash, but am at a point in my business where my time is worth more than squeezing every penny (or ten grand) out of every deal, and I'm perfectly willing to pay some future profit to cut down on my frustration level, especially if it cuts down on my time involved.I've also done deals with friends many times and never had much trouble, but my friendships are solid and I value relationships over money in a big way so don't sweat the small stuff and address the big stuff before it gets to be a problem. 

I worked nights and spent most of my days at the house supervising the contractors and helping with any work I could so I could try and cut down on costs.

My own persnal opinion ( and only and opinion) this shows me he is cutting corners.

Seems to be a double edged sword for institutions.

Reason I ask is because what would happen in the event that after the LC was executed, the tenants were to completely trash the property (or some other scenario causing extreme property damage) and the expenses to repair would be so high that it would not make any financial sense to repair and re-rent out, and so the new owner decided to cut their losses and strategically default? 

It looks like you may have your work cut out for you on that one, I look forward to seeing before and after photos!

If you need someone to hold your hand all the time, you may not be cut out to be self employed.