My total cost is 40k, can resell at around $130.

And that depends on how you view the costs. 

It did not cost me $0.01.  

To estimate expenses, consider setting aside a percentage for management fees, plus costs for cleaning and utilities.

Utilities cost $150 per month.

Yes we avoid custom work to help keep cost down. 

This also leaves me with $3,750 stuck in the deal (not including financing and closing costs, which could easily add another $20,000).In total, if I had to include closing costs and financing costs, I’d have about $23,000 (if not more) tied up in the deal and lose close to $700/month before accounting for expenses.

-save $1k+ in taxes and fees yearly-can use the savings to get more insurance and a higher liability than the value of house. for flipping houses in California does anyone just put into sole proprietor own name and just use the $1k+ in savings for LLC costs into Insurance or use for savingor am I just being too risky. 

I would also send the insurance company this same letter and tell them they are going to be responsible for the cleaning and repair cost.

For example, they won't need to cover your personal belongings (furniture, clothing, etc.) because you won't be living there.A landlord policy should cost about the same as a homeowner's policy; it just changes what is covered.