HELP! Issue with insurability of purchase intended to be a rental

[Diane Perry]

HELP! I have a situation and would love to know if you guys think I should walk away. My realtor is terrible, made a lot of mistakes, and doesn’t advise me well. She filled in the contract NOT as I requested, and it turns out I do not get to walk away if the property is uninsurable. (It was selected “NOT WAIVED” on initial offer, but it was a bidding war and I told her to remove the inspections, but instead she removed all contingencies and resent it.)  Turns out the home has a roof that is possibly asbestos, and my insurance company won’t cover it. 

I can get interim vacant home insurance for almost double the normal cost which gives very little coverage, and close on the house, then when it is rented try to get a renter’s policy with regular coverage that will accept that roof, but ins. broker is saying then the new company will want all the policies on all my properties (4) including my residence insured under their company, and I have no guarantee at this moment they will insure this property with this roof at this time, 

OR 

I could tear the roof off and pay tens of thousands to replace it so I can get it covered under my current company (State Farm) 

OR 

I can walk away from the deal and lose my $5K deposit. It is a 2240 sf brick home in dated but good condition except the valleys need to be replaced on roof, which was to be about 10 grand anyway, but I was going to put that off until next year. 

It was on market for $75K, and seller chose my offer (among many much higher ones when I dropped inspections) Cash price, quick close of $62K. Probably with a little update it might have been a $110-120K ARV except for this issue of insuring the roof.

Expect to rent it about $1200 I hope, (rentals in this area half the size get $925, and most are in abominable condition, this is dated but excellent) taxes about $2200/year. 

Other than the valleys, the very respectable slate roof company said the tiles themselves could last more than another 30 years. They are original to the home, which was built in 1926. 

Closing was supposed to be later today, but insurance called me back this morning after talking to underwriters, so I am deciding to delay maybe a couple days if the seller will allow it, but maybe I should cancel. Broker says I cannot sue under agent's E&O policy because it was supposed to be 15 days contingent even if she had not waived insurability without my permission. I think that's bogus. Kicking myself because I have to check everything she does twice and missed this, she is a terrible agent and I certainly will never use her again.

I think it’s an excellent investment property and I will get a great return on it, but need to get good insurance. So far only found one company that will accept it saying it is vacant, because insurance broker that is NOT my usual State Farm said that until a tenant is moving in, it is considered vacant. State Farm would have covered it as an investment property and would have given me 30 days grace period to get a tenant in there, but won’t cover this type of roof.

Advice?