A few things to keep in mind:Section 8 requires the property to pass an inspection based on HUD’s Housing Quality Standards (basically making sure it’s safe and well-maintained).The rent you charge has to align with Fair Market Rents (FMRs) in your area, so it’s good to check what similar properties are renting for.You’ll still be responsible for maintaining the property, but the upside is that a chunk of the rent is guaranteed by the government, which can provide steady income.Check with the local housing authority about any specifics for your area—every jurisdiction does things a little differently.This could be a great niche if you can find a good deal on the land and make sure your expenses (like maintenance, insurance, and occasional vacancies) are covered by the rental income.

Alternatively, there are high-yield online savings accounts like Marcus or others - the difference is that banks have some inherent risk, thus the FDIC insurance. 

Take a look at the rents for both sides vs current mortgage payment (if any), new payment on the cash out or HELOC, taxes, insurance and HOA (if applicable).

If anyone knows good insurance brokers, that would be great.  

The problem is that you have to accept the dog but the insurance carriers do not cover bites from Pitbull's.

Quote from @Joe Steinheiser:Yes, builder risk insurance..

Honestly, that is all the insurance company needs to report the loss and raise your insurance next year.Good Investing...

Yeah, insurance is likely more than sufficient for most investors.

This seems like a lot of work to save 15% of $35k in taxes (Less than $5k.) especially if you have transfer taxes or title insurance, or you convert your long term 15% rate in to your son’s regular income tax bracket.I hate paying taxes as much as the next guy but this lemon isn’t worth squeezing.

Prepaid items are comprised of property taxes and insurance and prepaid interest.Property taxes and homeowners’ insurance will depend on whether or not you have an escrow account, when you are closing, and when those items are due.