You have many options here.1) Terminate the lease: It clearly states that they must have renter's insurance and the lapse can result in a default2)Have them cover the damages with sufficient evidence that they caused it3) Claim it on your insurance for the property, likely they won't give a good payout unless a fire, flood, or some sort of wind damage.

What is your price range and what do you consider to be a "medium" rehab project, rehab costs = to 25%-50% of the purchase price?

That is a big part of turnkey investing these days, since rates are in the 7% range.

What price range are you targeting and I take it you're OK with at least medium rehab (>=25% of the PP)?  

Price RangeDefine your financial boundaries based on available capital and borrowing ability:For Class A & B, financing typically covers 75%-80% of the purchase price, allowing you to buy properties in the $6M-$12M range if you have $2.3M total cash.For Class C & D, due to higher risk, the price range might be reduced to $5M-$10M with the same cash.5.

Do you have a price range in mind for the various properties you might acquire? 

@Drew Poniewaz  I just mentioned a range of reasons why zillow and craigslist delete seller financing ads. 

Once you start stacking more and more property loans into your personal name, it can bleed into your personal credit worthiness.This bit me in the butt when I wanted to refinance my own house when rates were in the 2% range.  

And feel you'll have more options / strategies to explore with a tri or quad plex in the long range.

I have helped several investors recently acquire single family homes around the $400K price point that rent in the $2,200-$2,350 range.