I am friendly with both the stroke survivor and investor and after hearing the circumstances was wondering  (hoping) he might have some kind of coverage.  

I don't think the tenants have renter's coverage, though it is recommended in the lease.  

Im $140,000 in debtNOI:  $6,944.00Cash on Cash ROI:17.56%Monthly Cashflow:$439.09Income-Expense Ratio (2% Rule):1.96%Total Initial Equity:$94,000.00Gross Rent Multiplier:1.89Debt Coverage Ratio:4.15Purchase Cap Rate:27.78%Pro Forma Cap Rate:5.79%

They should not be allowed to rebuild unless they are informed that doing so will make them ineligible for future government assistance and that they will not be able to get insurance coverage from any company. 

Also make sure the policy has something called "wrongful eviction" coverage.

Bank will do their own underwriting to determine NOI and come up with a debt yield (NOI/Commitment amount) or debt service coverage ratio.

We both have full time jobs and a 9 month old baby, that we would love to spend more time with in the future by supplementing our incomes.  

Would like to grow a healthy cash-flow portfolio in the next 5 years to supplement (or completely replace) retirement.

what folks who have not really owned a mortgage or hardmoney company like I have don't realize is.   20 to 25% equity coverage is not near enough in a default scenario unless the asset has gone up substantially from when the loan was made. if the value is static.. you will lose principal.. in most cases if you only have 20 to 25% equity coverage..

Liability risk is high, insurance coverage will be an issue, you will get sued if there is a drowning and a waver will be of zero protection.