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

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

Instead of evicting them, i was thinking is there some way that I could rent it back to him for very cheap (mainly to cover just the taxes/ insurance) ie 2k a year rather than the going rate of 2k a month for similar properties.

The cost associated with insurance for not having 20% is peanuts compared to what you potentially can do leveraging your down payment. 

Hopefully your lawyer also mentioned insurance- title and hazard.A quitclaim deed transfer can hurt your title chain and title insurance. 

Insurance is definitely an issue there, and will continue to be.

Make sure you talk with your insurance company on what you would need to faciliate these types of amenities in your rental.

The amount of downpayment requirement insures buyers having "skin in the game". 

I generally prefer higher since I don’t plan on putting in small claims, it’s basically just for catastrophic loses and the savings in premiums over multpiple properties for multiple years should balance that out if I have ever have to use the insurance.

For example, what is the monthly revenue for the property and what are the "All In" expenses, including mortgage, taxes, insurance, utilities, repairs, etc...