I didn't get a lot of water and it was all manageable by the tenants, but given this happened I want to try to understand the reason and where to look (e.g., do I need to install a new/ better sump pump). 

For example where water is included in the rent. 2.

You need to have enough money, probably in the $100-150k, amount to put the property under contract, and do the feasibility study on the property, Phase 1 Environmental, Property Drawings for roads, water sewer, and utilities, and have a completed budget so you know what your costs are.At that point you can go out and attract investors, I don't thing that developing raw land is necessarily cheaper than buying discounted finished lots. 

Everything seemed to be going well and then... the water main burst at the property. 

Sewer and water systems are not designed for 8 adults taking showers and excreting waste. 

I would advise to separate the water and power meters.

I probably profit about $0.50/load based on my cost of water and electricity.

This Water Street property in Delphi, IN, was an attractive investment due to its low purchase price of $21,000 and the potential for significant value addition through targeted renovations.

Make sure tenant knows how to flip breakers, turn off the water main, relight water heater pilot, etc.

I wouldn't limit it to roof as wind and water can damage other areas of the home..what if a window was left open and the interior now has water damage etc...Did you already bind your insurance (likely not if you are two weeks out) So there may not be a reason for them to dictate you get it reinspected.