Insurance Question Duplex Converted to Fourplex

[Adam Lerner]

I am considering purchasing a duplex in Indianapolis IN. The house was separated into 4 units by the current owner and currently has 4 tenants. I am concerned that I may run into problems down the road if I ever needed to make an insurance claim since it does not have a CO for 4 families. Will an insurance company even insure a property that is in the state? What could potentially happen if there was a fire?

The tenants are part of a housing benefit program so the rent is all paid by a nonprofit organization and it is extremely high. Potentially a 12-15% cap rate. This property would be a cash cow but I am not sure if it is worth the risks. The neighborhood is not good.