.$275000 with 25% down, taxes $4080, insurance is 3000 yr and rents is $3800 month, Water $400 mth. 

Maybe you can call your insurance agent and they could possibly whip up a letter or something.

To calculate Net Profit, we need to deduct: Construction Financing, Investor Capital, Overhead, Insurance, Warranty, Etc.

That (and insurance issues) are two big risks.

A lot of sellers are panicking, thinking the market’s going to crash, but they don’t really understand what’s happening behind the scenes—demand is still strong, people are still moving to Florida, and that creates opportunities.I own 32 properties, and I’m always tracking values—rents, insurance, taxes, all of it.

Here in the USA you need what's called a "construction loan" and it's also very hard to find a company that will insure you if you're a newbie.

I understand that I need to account for taxes, insurance, and other costs—Should I go with a LML and then do a refi later on?  

So your super basic P&L may look like: $30,000 Rents-$3,000 insurance expense -$9,000 interest-$3,000 taxes-$8,000 operating expenses-$14,000 depreciation ----------------$7,000 loss on paper for the year  so negative taxable income But remember- $14k of that (depreciation) was something we didn't actually spend money on- so cash in bank at year end would be $7,000. 

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

I have recently switched my insurance from home owners to landlord policy.