All the hard money lenders I've worked with in the past (and the one I currently work for) deem an appraisal necessary for risk management purposes to insure AIV and ARV estimates are good.Curious how you'd manage risk without one? 

I don't think it should matter if the deal is seller financed, cash, or hard money; the title search and insurance process should be the same.

Option 2 with second lender is, get an FHA loan at 3.5% and use the concession to buy discount points and bring a 6.2% interest rate down to a 5.4% permanent buy down, putting me at around $3,450.00 monthly PITI and also adding 8k to the top of the loan for mortgage insurance.

My insurance company said they wouldn’t cover the policy with the fuse.

Don't forget to add fringe benefits such as health insurance and also payroll taxes, etc. 

Using escrow company & title insurance will protect you from an unwanted surprise.

I was wondering if anyone had any tips or tricks for this area dealing with the insanely high property tax and insurance rates?

You can - 1) establish a trust for asset protection, 2) utilize the Homestead Exemption for property protection, 3) consider tenancy by the entirety for marital property (this might just be applicable to California, my home state)4) make sure you have adequate liability insurance for additional protection, 5) think about forming a business entity to shield assets, 6) and have proper estate planning for asset distribution.Seek tax and legal advice from experts in your state.

Today question is Universal Life Insurance (provider,) I am looking recommendations for companies that work with real estate investor?

I own a lot more than 2 homes and all these years later still have never bothered with LLCs - I just keep really good insurance.