In that instance 80% is allocated to investment and 20% to primary. 

What sort of arrangement would you work out in this instance?

I have had two instances recently that after a non-response from the listing agent they come back 3 weeks later after their other offer falls through and determine if you are still interested.

For instance, there is no sustainable economic phenomenon that can prop up this economy or real estate market, right?

It's just a quick rule of thumb where you see if the total rent measures up to at least 1% of the purchase price.So, for instance, on a 200k property, you should be looking for at least 2000$ rent/month, otherwise, it's not that great a deal.

For instance, if they didn't get the renter's insurance, there's be no way for me to evict them on those grounds.

Essentially, when you depreciate an asset (which you do with real property (rental real estate for instance) and attached non-real property (appliances and such) every year on your income taxes), you've offset your taxable income.

But that could also be a case of me escalating way too far in my mind.If this is the first instance, you might want to pay it and bring them together with a change they sign off of, that they'll both pay the fine if it were to happen again.

Ideally the seller should rectify the peeling paint themselves, however I have observed instances where the buyer completes all the work to meet FHA guidelines.

For instance, the toilets, vanities, light fixtures, flooring, tile, backsplash, etc.