I am interested in a property that requires a cash purchase because of a structural issue with the house. 

Depends on how will be doing all the leg work and putting up the financing. are you experienced or is the new partner bringing the experience. if you are putting financing and leg work then I will go with a higher %. if everything is split evenly then you can go 50/50 on profit. please create operating agreement to avoid issues later down the road.

The policies issued by NFIP and the WYO companies are standard and should give you worst case scenario for the cost. 

Then went to multifamily, 4 units or less, but ran into a lot of issues with even poor performing properties being bought at, or above list, by people planning on going owner occupied.

Unfortunately they don't issue HELOC in CA. 

@Shmuel Waldman The big issue I see is your cash on cash return being less than 10%.

Not a big deal in most cases, but if it becomes an issue, the most they make you do is payoff the loan and you can refinance or sell the property to do that.

Animal cruelty charges can be pretty significant if the issue is extensive.When are you expecting rent?

Apparently it was only done for the worst offenders, and after multiple stop orders were issued to the property owners. 

Their personal relationship issues are not your concern.