They were moving to California from Florida and couldn't spend the time or money to go house hunting first.When they arrived, they hated the place and proceeded to act like jerks, threatening lawsuits and such, that I just gave them their money back to get rid of them.I will never rent to anyone sight unseen again.

One home we saw is 4,000sq/ft beautiful Victorian style on a few acres with a 900sq/ft in-law suit with all new appliances, hardwood and private entrance. 

The part where I agree to pay the amount owed by seller to the HOA in order get a civil lawsuit against the seller released as part of the terms, and the part where I pay the seller's IRS liens?

Do board members normally have insurance coverage that protects them from lawsuits if they are being sued for mis-managing the property? 

The list is in the class action lawsuit filing, as revealed by this article: http://www.businesswire.com/news/home/201503040063...

What happens if you lose all your real estate in the next 16 years due to illness, lawsuit, etc....   

Do most people do a couple of flips/buy some rentals before forming their LLC because they want to avoid the fees and they can use insurance coverage to cover any lawsuits? 

I haven't seen many properties with "In-law suites". 

You have $40k of equity that's at risk of a lawsuit.

Otherwise, that tenant likely has a free lawsuit they can file anytime it's convenient for them, even if the arrangement works for everyone now.