However, if you sell instead of rebuilding, the IRS may include part of the payout in your taxable gain unless reinvested under the §1033 involuntary conversion rules, which allow you to defer taxes by purchasing a similar property within two years.If the property was your primary residence, you may exclude up to $250K (single) or $500K (married) of gains if you lived there for at least 2 of the last 5 years, likely resulting in no taxes owed.

Your personal loan has a 5 year balloon period.  

A FHA 203k Loan is where the purchase price and rehab costs are rolled into a single loan.The downside of using FHA or a FHA 203k is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC.

I personally would revisit your strategy of buying a negative cash flow property in SoCal, right now.

They do require that person to have no assets, so a house in her name could be problematic.

They not only went to our office, but also the personal residences of myself and Kevin Bupp.

I have personally owned investment property (both long-term and short-term rentals) along the lakeshore.

Was interested in the conversation.

I do know that unless a person knows what they’re looking for and how to close, it can take a lot of leads to get a deal to the finish line. 

Home insurance would cover anything on premise, but as @Jonathan Bock stated, it's usually for significant damage.This might be something you would tackle on your own, but worth to have a conversation with your provider first to see what they have to say.