If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.6.

@Jessica Seppo,Many people take the cost of an LLC and funnel it towards more insurance and an umbrella policy.

As an investor - if I was putting $125k down I would want title in my name and a clear title policy - so that is where I would have the issue. 

Yes I have known it to work because the owner is not a push over, enforces policy and can make it run good......however, do you have the right personality to do this, AND if you move out can you continue to have the house run smoothly with no one in charge.  

As the new owner, you’ll want the lease and your landlord insurance policy to take effect as soon as you take title to the property.Temporary Lease Considerations:While short-term leases can work well, leasing to a seller long-term often leads to complications.

Then the tenant should be required to add you as "Additional Insured" which protects you under their policy.

Your primary strategy should be to have the Contractor and all Subcontractors add you to their insurance policy as Additional Insured. 

How would an umbrella policy protect against a security deposit related claim?

They do have policies in place, so if you're not willing to go all in, then this is not the software for you.

Assuming you don't have a mortgage that requires a certain level of insurance, you can get a stop-loss policy covering all the properties.