We're now just waiting to see what the appraisal looks like and confirm the entire property is fully insurable.  

He confirmed in June that he wanted to sell.2.

Thank you I have personally worked with @Jill Weatherford and can confirm that she knows the local market well - she's a local investor herself and works with investors. 

While there is nothing illegal about this, and there is certainly value in over capitalizing a deal to have reserves, this is a balance.  

Make sure you’re clear on those and consult with a tax advisor to confirm your assumptions.

Build up your cash reserves people...

The numbers I ran yield a decent 300-450 cash flow depending on how conservative I want to be with reserve and property management fees. 

But the best ways to get started are, in my opinion: 1) save up enough for a 10-20% down payment and then save a lot more on top of that for reserves, overages, and any unforeseen repairs.    2) have your financial house in order and have credit above 700 to get more favorable rate and terms from lenders.   3) speak to a loan officer that is experienced with fix and flips and get the necessary documents together for a pre approval (typically not much required, usually a valid ID, LLC docs if any, and two months of bank statements showing funds for down payment and reserves). 

Hopefully you have reserves for a rainy day. 

You can also consider increasing your deductible to lower the premium, assuming you have enough reserves for emergencies.Energy Efficiency Improvements→ If you cover utilities for your rental properties, look into energy-efficient upgrades (such as LED lighting, better insulation, or energy-efficient appliances).