If you don't actually replace the damaged property, the insurer will normally only pay you the "actual cash value," i.e., the depreciated value of the property.

I have some brand new homes in Phoenix that cash flow with 25% down.

Even if the rental has a decent cash flow with additional flood insurance, we're still not sure we want to take on that risk as we are out-of-state investors (planning to move back to KY in the future, but not now) and we don't like that it will potentially bring down the perceived value when we try to sell it in the future.The seller has never lived there and has not provided any information on if it has flooded before or not. 

However, co-living allows you to acquire properties with as little as 0%-5% down, drastically reducing the amount of cash required.Instead of needing $100K+ to buy a rental, a co-living strategy lets you start with a fraction of the cost while achieving higher returns.3.

IMO it’s hard for me to sell a great cash flowing asset.

Are you cash flowing the property?

My concern is doing the cash out refi on my other rental and causing a new and much higher payment on it that I can't just pay off like a loan.

Quote from @Brad Kremer: Hi everyone,I own a cash-flowing duplex in Austin, TX, that I bought 8 years ago when rates were considerably lower than they are today.

These included cash buys for flips, seller financing, and subject-to deals.

In all honesty my clients putting down as little as 5% tend to cash flow as well.