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". 

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

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.

With a private auction of an already foreclosed property, you will usually be allowed as part of the closing to have a title search done and to buy title insurance.

My partner and I keep an excel spreadsheet of rent, our purchases, utilities, taxes, insurance, and money spent on contractors.

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.