You could possibly drop the mortgage insurance, but the difference in rate would most likely eat up those savings.  

You'll want your PL named as lender on the property insurance policy.

Property taxes and insurance are extremely low there so my net profits on those two are $1,000/month and $800/month respectively with loans with 6.875% interest rates putting 20% down. 

Crime is a concern, but I'm thinking with the appropriate limited liability and insurance structure this could provide a reasonable shield.

You have to screen the company to verify they hold the appropriate licenses, insurance, etc.

I think this is the gift and the curse of a still emerging asset class (short term rentals) - as it becomes more "institutional" i.e. more like commercial real estate with more sophisticated buyers then financials and systems for this will likely become more streamlined and stable, but we are still in a place where the buyer pools are more newish investors or typically residential basic investors, so not has experienced or sophisticated evaluating investments based on a detailed financial analysis like more seasoned commercial investors likely would.anyways, just a guess on what might be going on here

I've established a very stable  I've determined that local properties should be my first choice and by local I mean within 1.5 hours of my primary residence.

I'm currently paying $4100/year for insurance, and when it renews in October it will go up to $5500/year.

YUP very easy work around for this but it does take a lender who will be a little less risk adverse than bigger HML that will simply say no title insurance no loan..

Update your insurance.If they do, inform your insurance company about the change in your property's use.