Market selection is tough because there are so many choices.

Also, when you say rental property, are you referring to short term rentals or long term?

And for reference my sister is dealing with a run down house in Louisiana that has a value of about $95,000 and she shopped multiple policies with multiple insurance companies and the best rate she could get was $2500.

However, I did take issue with the tone of the message, especially the part where they told me how they’d be paying rent.For context, there are no outstanding maintenance or repair issues, so I’m unsure what the tenant is referring to. 

Do you check Landlord references?

I am not from real estate background and have been referred to bigger pockets by friends.

Every REI has a starting point, a build up phase, and an exit phase (this doesn't have to mean out of REI...it refers to cash).The key to determining this is based on an investment plan, and where the REI is in that plan. 

Do your due diligence and call references, contact employers, meet the applicant, etc.

If that is the case then that is considered cost of doing business and I would advise that should be calculated in your costs/returns you provide to the investor.IF you are referring to the investor who is the borrower - then I would have included that cost in the loan agreement.

@Christian Solis For a fix-and-flip business, structuring your venture as an LLC taxed as an S-Corp is a smart choice, providing both liability protection and tax efficiency.