Most regular HOI policies don't cover ground water which can end up leaving it the owners responsibility to perform the water mitigation. 

I feel much more equipped moving forward than I did an hour ago.You are paying for the full year HOI policy up front.

Operating Expenses total $760 monthly (taxes, HOA, HOI).  

If you decide to move out and sublet, make sure you notify your HOI agent immediately or all liability falls back on you.Let me know if you have any questions.Regards,Joe Scorese

Cash flow of about $400 (if rented at $850), after factoring increases in property taxes, HOIs and utilities.Option 2.

Do all Heloc's require HOI ? 

I have flipped/purchased properties in the past but they have all been straight purchases (so I arranged the typical HOI coverage).

Assuming HOI on an investment property was the same (i'm sure its not), here's my figures:Proposed monthly:$660 - mortgage at 30 years at 4.5% estimate$60 - property tax (appx $700 annually)$70 - insurance (appx $800 annually)$60 - vacancy at 5%$83 - maintenance (est $1k annually)$1,200 - conservative market rentCash flow: = $260Our "next" home is highly fictitious, but I intend to spend a similar price and search for something that needs some cosmetic work for quick equity with the intent that we may eventually rent that home out later in life, as well.Would these figures make sense?

the insurance (HOI and PMI) and taxes are included in the $1250 esitmate.

My monthly net debt (mortgage + tax + HOI + HOA + PMI) is about $300 more than the projected rental income.