Natural disasters and requirements for 100% hurricane coverage have had a dramatic impact on HOA's insurance costs, and also affect Buyers due to lending requirements. 

Quote from @Jon Martin: Would tornado damage require a wind policy?

FNMA does have limited allowances if the LLC is whole owned by the borrower. https://servicing-guide.fanniemae.com/svc/d1-4.1-02/allowabl...There's really only three reasons to put your SFR properties under an LLC:1) A DSCR lender requires it: just setup the LLC correctly.2) Anonymity: In Michigan, you can create an LLC with a Registered Agent and use their address to hide your ownership. - Have seen many investors create their own LLC and use their name & address:(- Only works if you put a property in LLC when you purchase.

Same for 2-years of job/income stability.Tenant Default: 10-20% probability of eviction or early lease termination.Section 8: Class C rents usually meet program requirements, proper screening still recommended.Vacancies: 10-20%, depending on market conditions and tenant screening.Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.Class D Properties:Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months.

In terms of material participation for cost seg I'm good there and meet the requirements. 

Is this a conversion that will also require substantial renovations?

Conventional loans require a year to use the new appraised value which most investors want to use especially if looking to cash out and get out of a hard money loan.

I put it in my information when guest are booking, that they will be required to provide their email and sign an emailed(I use DocHub) to sign the rental agreement/Golf cart waiver.

Can anyone shed some light on what kind of down payment, terms and qualification requirements we would typically be looking at for an SBA or low down commercial loan?

It is my understanding that in Pennsylvania an escrow account is required for tenant security deposits.