Naturally your property must sell before you can take title to the new one, but nothing prevents you from getting it under contract and make the process as smooth as possible.  

So stop, stop trying to put square peg's in round holes.

I am a real estate agent trying to make new connections that is looking into property investing in the future. 

I completely agree that personal interaction can go a long way in building rapport with guests, especially when you're trying to create a memorable experience.

I spoke to few folks and other option is that I take the insurance settlement and not rebuild and try to sell the house as-is.

Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive?

This is something I try to live by and teach my kids if I can - "A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly.

pretty tough but who knows give it a try and see what happens

If the tenant is claiming to be living in a hotel, she may try to get you to reimburse for that cost unless section 8 has a new process to reimburse them for this... which sounds absurd but I'll let you deduce whether or not you're dealing with someone who is used to paying for things out of their own pocket. 

For sure you need a lender who understands them VERY well - try connecting with @Jose Valdovinos who is here in Chicago, but lends across the country!