This could get us a lot closer but also recognize that with this much obligation what I don't know could be catastrophic.  

Cutting corners will not seem like it was worth the risk if something catastrophic happens and you are left holding the bag.Verbal Agreements Will Not Protect YouThere is a fine line between being trusting and naïve.

My goal with insurance is to cover a catastrophe anything else I will cover myself. 

The only reason why I haven't sent her a lease agreement is because its a 4 hour drive from where I live, and I'm wondering if this is a catastrophe waiting to happen for a first time home buyer.

Unexpected medical bills, chronic illness, catastrophic emergency and more are the leading causes of foreclosure. 

Don't make a claim unless it's a catastrophic event. 

Mistakes can be catastrophic at your point in life.

And once you find out what that rate cap is, you have to understand if the deal was underwritten to that rate.If the deal doesn’t work at the maximum rate allowed in the cap, then the deal doesn’t work.Debt TermsAnother aspect of the debt that investors should understand is the term of the loan.Forced sales are another big item you want to avoid at all cost when investing, if there’s a balloon payment coming due within a few years, we want to understand what the extension options are for that loan.A popular format might be 2 + 1 + 1 which means the initial term is 2 years with the option to extend for 1 year twice.There are typically fees associated with exercising these options, but the fees are significantly cheaper than being forced to sell when you or the market isn’t ready.Having rate caps, underwriting the deal to those rate caps and confirming they still work, and having loan extension options are 3 things that great operators should put in place to prevent catastrophic deals, and something you should vet for as an investor.

I've had many MANY micro failures (currently no catastrophic failures), but when and if I do it won't change my outlook on real estate investing or life.

The interest on that primary mortgage is a tax write off and rates aren't going to go lower for a while unless we see a catastrophic market changing event.