Whether it’s hurricanes, tornadoes, wildfires, or just flooding the losses the insurance companies are seeing over the past 5-10 years are huge.

These policies are typically more expensive and cover way less in the case of a loss.

Cut your losses admittedly I dont know your market so ..... 

I also know a professional property manager is more efficient, has better marketing, established policies to handle problems and prevent losses, knows and complies with the law better, and more.But maybe you can do it as well as the PM.

If there is no coverage, the question becomes, what is the value of loss taking into consideration depreciation? 

If it's a loss its a loss, maybe I can write it off on my taxes or maybe our story saves others from a similar pain.

The remaining 25% of the gross rent will be absorbed by vacancy losses and ongoing maintenance expenses.When using a lease agreement, the lease agreement amount must be supported byForm 1007 or Form 1025, as applicable, orevidence the terms of the lease have gone into effect.

My personal advice is cut your losses and move on. 

If you seriously want to clean this up and are willing to take a risk, I would absolutely switch things into my name and begin taking care of the property as my own...it takes up to 10 years, but if you'd be willing to start caring for the property and were able to at least rent as a break even, pay taxes etc, then it's no big loss if the owner came back and stopped your claim.

Investors buying 5% cap rate properties are most likely banking on rental increases while taking appreciation losses on their taxes as well as mortgage interest.