Dwelling limit is the total amount they will cover for the property in a single loss (or depending on the wording of your policy within a certain term no matter how many losses you have)FYI a "loss" is a claim.All perils deductible means you have coverage for anything that happens to your property UNLESS it is specifically excluded in your policy. 

Currently the property ( old barbershop that must be converted into a single family dwelling ) is in a high valued market.

For example, I can instantly see what properties are selling for x amount.

While it may cost 400K USD upward to cop a good property in the US, one can purchase land for near $150K and build a 10 room dwelling or a townhouse type apartment complex for around $200-250K USD.

From a distressed sellers perspective, why would they sell to a small unknown flipper when they can click on a Zillow "Instant Offer" and receive more money?

TRUST ME, the girlfriend will admit that he was living there and will likely even allow him back into the property against orders.But even if not, if he was residing there, with landlord permission or not, lease or not, he is a TENANT, or at the very least an authorized occupant, and as such cannot be prevented from entering his primary dwelling...not by the landlord.

When you buy a property for a rental, you will want "Dwelling coverage". 

These could be instant on boilers that could also replace a water heater. 

So he insured this last one as a rental dwelling policy.

The laws for renting out MIL’s or “accessory dwelling units” seem to vary drastically City to city.