It isn't having paid off properties that offers security, there are still taxes, insurance, maintenance and management involved. 

Explore the possibility of doing liability insurance instead, if you don't have much equity it may be your best, and much cheaper option.  

The Homeowners Insurance will include Builder's Risk.

If your insurance coverage isn't enough, they could seize the LLC assets, but not your personal assets.Additional thoughts:1.

2) Their contractor must be properly licensed and insured and we require copies of all this.

Here’s the situation:Purchase Price: $540,000Down Payment: 20%Mortgage Rate: 7.125% (30-year fixed)Monthly Expenses (Mortgage, HOA, Taxes, Insurance): $3,706Realistic Max Rent: $3,000As you can see, I’m currently short $706/month even with max rent.

If you are trying to get a cash out refi, I would think the bank would want to see the correct type of insurance for the business you are running.

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build.

I’m wondering on the process of getting things in order to rehab the house through insurance and put it up for sale.

Enough immediate cashflow to balance out the mortgage, taxes and insurance.