Once you have earned some money and mature a bit you may find that it is also part of the responsibility that comes along with success that may lead you to simply want to help a community maintain or improve its quality and value.

My experience has been that homes cut up into units may or may not be legal in any given community.

I don't like the term run away.. you can simply walk briskly.. 

In the *rare* event a mortgage is called due on sale by the lender, typically the options are to 1. refinance, or 2 cut a check for the remaining balance of the loan, correct?

Find out about taxes on the property are they under a special tax cut? 

Tool wise all you need is a angel grinder with a masonry blade to cut and shape regular blocks for the back post.You could also easily replavce all posts yourself with 6 X 6 PT.

He told me that if i want my 7% return, i can simply rise the rent of the currently renter, that will remain with a 3 year contract in the property.

Razor cuts are really tough to get out and sometimes never come out. 

I had insurance policy that covered the loss of rent and the HOA cut us a check to renovate it ourselves.

YUP  exactly anyone who thinks low value  assets are passive simply does not know what they don't know or are in denial or will get an education real quick.