At the same time no matter how much excess insurance coverage you obtain, there will always be a policy exception for gross negligence and even negligence will likely be covered only under reservations of rights meaning the carrier can opt not to provide coverage. 

It's important to ensure that you can cover the HELOC payments from the income generated by the new property.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

@Moshe Marciano it will be up to the title or escrow company to allow the closing to take place by putting funds in escrow until resolution.Often, they will want 125-150% of the amount in dispute to cover additional interest charges, etc.If this is allowed, you can then hire an attorney to sue the PMC for slander of title.

From my employer, I have legal insurance through ARAG that covers 100% of attorney fees when buying a primary residence, filing fees are extra.

Trying to keep it as simple as possible, but cover the important stuff.  

The investor who purchased in 2007 with no cash flow and large leverage would either have to have had the cash to cover 4 years of negative cash flow with negative equity in their property.  

I have dozens of examples.You can get a better return in another market and use the additional income to cover the expenses of property management.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

I can cover the negative cash flow for the remaining mortgage term and may look at paying it off early.