Amid surging demand for apartments, the US rental market is contending with the largest supply of new units in four decades.

Not sure how many PMCs you've had bad experiences with, but we'll take exception to:"Then do a thorough research on tenant applicants (note: leaving this to a PM may be hazardous to your financial health)".BP seems to have more threads about screening mistakes by DIY landlords as opposed to PMCs.Now, if you'd have mentioned Maintenance, you'd get no argument from me:) Even the PMC industry acknowledges maintenance as one of the biggest challenges.Rereading my post, I kinda see how I sounded negative toward PMs.  

My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away?

Get replacement cost hazard insurance along with an umbrella policy of at least $1M, probably double in your area.

The underwriters will be looking at similar property condition requirements (c4 or higher) of a conventional loan (no deferred maintenance or safety hazards which would affect value).  

@Jim G.Per the International Residential Code if the glazing is less then 60 inches vertically from a standing or walking surface then yes it’s required to be safety glass as it’s considered a hazardous area.  

When you posted your review, we assessed the unit to see if there was evidence of mold, urine or any other health hazard.

We ended up having to dig up parts of the front yard to replace the main water line that connected to the city water supply to the home.

Licensed contractors supply materials and subsequently warranties.Also how would a flipper comply with assembly bill 968 if they supply materials? 

Provide the supplies.