This can be counterbalanced by the fact that there should be an instant increase in market value of the apartments, although not all would be a windfall since some of this increase would be attributed to the payoff of the underlying mortgage, which of course would result in cash paid for their share by the individual owners or a larger individual mortgage on the condo units.

The policy is also referred to as a "Dwelling Fire Policy" but has the necessary endorsements and limits required by my lender.

While the LLC would have instant equity with the purchase of the house at a cheap price.

It will eventually generate more cash flow than a single family dwelling 3.

I looked at one of the estimators and depending on the condition/upgrades it came out to between $725,000 and $875,000 for a 4000 sq ft 3 family.We have multiple markets for the Dwelling Fire policies and when we change a client from Actual Cash Value (ACV) (depreciated costs) to replacement Cost the limits are what cause the increase. 

*BOOM*  A nearly instant payment. 

This will allow you to create instant equity (in most cases) and the rental income you're looking for. 

As Jason mentioned, you should max out the Liability on the underlying policy (dwelling/Fire form in Personal Insurance or General Liability form in Commercial) and then add umbrella coverage above it.When you insure the unit, you need to know what parts of the building your unit owns and what are owned by the association (common elements). 

✓Second Home Requirements must be occupied by the borrower for some portion of the year is restricted to one-unit dwellings must be suitable for year-round occupancy the borrower must have exclusive control over the property must not be rental property or a timeshare arrangement1 cannot be subject to any agreements that give a management firm control over the occupancy of the property must be underwritten in DU and receive an Approve/Eligible recommendation, with the exception of high LTV refinance loans required to be underwritten in accordance with the Alternative Qualification Path (see B5-7-03, High LTV Refinance Alternative Qualification Path).

However there are 70 individual owners of the dwellings at that address.