What insurance company is selling an owner-occupied homeowners policy for a house nobody lives in with a premium for guest damages and then knowingly letting you STR the property full-time as an investment?

Most are selling hype to get you to buy their programs by deliberately make it sound easy.Your profile here on BP is blank, so guessing you are a "newbie"?

I ended up selling that particular property.

UNTIL YOU SELL THE PROPERTY... then the cap goes away and you are taxed on the fair market value of the house which is usually the new sales price less maybe 15%.  

It's a bit burdensome and can make many sellers of such properties nervous since they often don't want to tell their tenants they're selling in case the deal falls through. 

For example, let's say you are guaranteed a 7% pref and the property delivers exactly that, but then sells with a capital gain. 

since its most likely not a lot selling 

Most common scenario I see is "should I sell?"

I know that is a long pay back period but don't plan on selling anytime soon, plus you never know what nat gas prices will do. 

It would/could be only 15% capital gains tax and yes you could/would deduct all selling costs including commissions and transfer taxes.