If the taxes are $3K plus insurance at $3K thats an escrow of $500+$1,445.24 =$1,945.24. 

Some neighborhoods might offer better returns or be more stable than others, so local insights can be super helpful.

You’ll also need owner and lender's title insurance as well as the standard fire and liability coverage, which I assume you already buy.

@Jody MartinezYou can pull the permits typically for the GC but not for trade permits. but if you do the work are you going to disclose this when you sell that you hired unlicensed contractors and notify your insurance if same?

@Kent KettellWe have been using loan to cost funding our deals the past three years, with community and credit unions, and the refinancing once stable to agency.we are able to get 80% of the rehab built into the loan, and it has allowed us to come up with less.

And as I said before, you need to make sure they have and continue to have STR insurance, not just homeowner-type or renter's insurance.

They have better appreciation with easier resale, are easier to fill, rents are more stable and tenants stay much longer. 

Current owner has had no issues in the 6 years of ownership and no issues insuring.

From the liability/asset protection side always use licensed and insured vendors, build out a robust contract management system, make sure the owner is always listed as additional insured.

The insurance company wants to fulfill its obligations to the insured, and the construction company wants to keeps its employees happy, working and retained while they travel to a job site.