You just need to have certain minimum underlying requirements per policy exposure.I do agree that having $1 million in underlying coverage is not a sufficient reason to not consider an umbrella policy. 

See if @Jay Hurst has a better financing option for you in Texas and get out of this mess while you still can without losing a ton of money and sleep would be my recommendation! 

Having cash reserves gave me the confidence to move quickly on a great deal without losing sleep over unexpected expenses.

At this point I know their income is sufficient, they have indicated they dont have a criminal issue, bankruptcies, and evictions. 4.

You probably had a little tickle in your moral compass which gave you pause, which is why you reached out.My wife is an accountant, when we look for every possible tax break it doesn't feel like theft, we feel accomplished to find a place for more savings and lose zero sleep over it.

Your primary insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

If you can provide additional benefits to the community, particularly those most greatly impacted that's great but that alone usually isn't sufficient in most municipalities.

Although you didn't post pics or anything so maybe it has a huge view or a 3rd sleeping area or a ton of sq ft.

Only in a very narrow set of situations - such as 'if' the spread between the interest rate on your HELoC and your mortgage financing was sufficiently  favourable to the HELoC - could the HELoC approach yield a better outcome than regular pre-payment of your mortgage.

If it's tight or you're uncomfortable with the tenant you have in there from a confidence perspective, especially if this is a first deal, maybe meet in the middle and get a lender at 75% or 77% (doesn't HAVE to be at 5% increments) that wont make you season, and leave a bit more money in the deal, but sleep better.Overall, if I cash flow well, have/keep reserves, and am comfortable I fixed everything in the house, I like to max out the LTV on refi.