Bank will do their own underwriting to determine NOI and come up with a debt yield (NOI/Commitment amount) or debt service coverage ratio.

what folks who have not really owned a mortgage or hardmoney company like I have don't realize is.   20 to 25% equity coverage is not near enough in a default scenario unless the asset has gone up substantially from when the loan was made. if the value is static.. you will lose principal.. in most cases if you only have 20 to 25% equity coverage..

Liability risk is high, insurance coverage will be an issue, you will get sued if there is a drowning and a waver will be of zero protection.

My agent tries to push business policies that cover liability, reconstruction as well as rent loss and coverage on anyone working at the property etc. 

Fahima,If you are not able to or chose not to move the coverage to an LLC I would recommend an Umbrella policy.  

The deal has good Debt Coverage at 1.62 and it will cash flow at 19k/year.The building is partially rented (2 units - 2 Bdrm and a Studio) with one 2-Bdrm ready to go.  

Just a real reminder why it's CRITICAL to make sure you have proper coverage and to review your policy at least once a year to make sure it's sufficient.

Each of my properties provides me $2,000,000 in liability damage, plus loss of use Income, and the usual coverage for typical stuff.

If the property cash flows well enough to cover the lenders debt service coverage ratio, and you have adequate liquidity, you should be able to qualify.

Is it possible to get renter's insurance to have some coverage over the home in the case it's destroyed by fire, flood etc.