I learned that may have converted the home to house for youths who have a checkered past (it is a noble cause, but the lease doesn't allow for this). 

The amount of skin in the game you have as a pose to the lender can cause rates to vary.

Insurance discovers the cause to be unpermitted work, then you're screwed.3) House burns down due to faulty work and injures/kills tenant.

You should also discuss the things that can cause a court to break through an LLC/Trust with a qualified attorney. 

This issue can be avoided completely by transferring the property into a land trust.While a transfer to an LLC will cause alarms at the bank and prompt them to send you a letter, a transfer to a trust will not.

Tell them you believe you are not liable for anything and while you understand that their injury may have caused them some difficulties, you are not responsible for those difficulties.   

Purchase price: $50,000 Cash invested: $18,000My realtor sent me this house and said the tenant caused a kitchen fire in it.

Her smoke creates a direct threat to another tenant (second hand smoke causes cancer) and disrupts their enjoyment and use.

(All I know is that for $1.9 mil...it better be a pretty prime bldg and location...cause 1.9 is San Francisco prices ;)

I wanted to ask you because you were a retail home buyer.The true cost to me was the house you should have bought, but glad market appreciation covered your later purchase.The next time you hear an agent say 'no harm in getting an agent, it's free/No cost to you' you know better.