I recently read an article that payments made by Zelle, Cash App, Paypal, etc in excess of $600 or $6000/yr will be reported to the IRS and a 1099 issued from the paying firm to the recipient.

In my area there are regular markets that will consider the Renovation Builders Risk but the Vacant policy normally is placed through the Excess (surplus lines) market.   

I fear that you spend $96k to add <$40k value and start with a negative position in excess of $50k.  

Does he have excessive landlord/tenant court history?

Looking for opinions along with pros/cons that I might be missing.Would you rather take a cash out refinance on a property to pull excess equity out (80% LTV)? 

Putting a quarter into cash may be excessive, depending on how much you have to work with.

There are a few other rules that the taxpayer must also satisfy including excess business loss rules, at-risk rules, and basis limitation rules.

So it last sold for 50k, and I paid just south of 200k for it, and so I am guessing that this increased price is what triggered the excessive property taxes. 

Because we are not looking into DTI, taxes, or employment we want to see reserves in excess of the down payment.

This is a good example of why most investors will control the insurance program.In addition, even if you have the tenant provide the Building coverage, you will still want to have a General Liability and Excess Liability policy cover the entity holding title to the property.