There were rat/pest infestation we discovered after moved out and we essentially spent $50k to completely redo the property plus wildlife mitigation and treatment.

ALL the mortgage REITs utilize VERY DANGEROUS amounts of leverage (8 X or more their equity) to “gig” yield to investors.  

We have a rubric that we use for the background check, LL feedback, rental history and income into that gives us an up or down or if someone is borderline then we employ risk mitigation items like double deposit, or LEAP policy. 

@Rodolfo Poeaccording to this article, Detroit safer, and so may be a better place to invest, than the most dangerous city in America - Memphis!

Secondly, entity structure is asset protection, not tax mitigation.

Their personal belongings are not your responsibility.It sounds like you have taken all the correct steps to mitigate the damage. 

People or the property are in immediate danger of being injured or damaged.

Here in NY, the eviction process is long and arduous, so getting out in front with a non-payment proceeding is one of a few ways I am still able to mitigate my losses.That being said, I screen, screen, screen, so in 11 years I have only had one eviction on a tenant I've placed (about 30% of inherited tenants have had to be evicted) and late payments are extremely rare (1 late payment in the last 150 or so). 

The tenants legal standing is the landlords duty to relet the probably - so the landlords damages are mitigated by the rent collected by the replacement tenant.  

I think it's also worth mentioning that having a Plan B replacement property is also critical in mitigating the timeline risk.Even if the preferred replacement property is already under contract well before the 45-day window.There are many unforeseen circumstances that could result in a deal falling apart before closing, even if things appear to be smooth sailing from the start.