If property insurance, it should already be covered by your insurance company and you can ask them to add loss of rental coverage.

The operation was checked and It was correct, they will have to cover the hole in the wall to dry the water that was on the floor.

Initially I was planning to use a mix of cash and stocks to fund this purchase, but now having the second thoughts whether I should use  just some cash and apply to some home equity financing options instead to cover the offer amount. 

Consider FHA loans for lower down payments, but remember, the key is to find properties where the rental income covers your mortgage and expenses, ensuring positive cash flow (although in Austin is will be hard, but not impossible, to accomplish)Aiming for five properties in five years is very ambitious but achievable with the right strategy.

if so, is it recommend for me to get a different loan that will cover the remodeling or should I pay that out of pocket, or should I seek for a FHA 203(k) loan?

I'm not sure where to start with private money or hard money lending when it comes to covering rehab costs on a rental property that we already own.

What percentage of monthly mortgage payment needs to be covered to be a smart move? 

If you're reserves aren't getting enough to cover inflation, you are going backwards.About my best idea is to look at your time frame.

However, it's common practice for the seller to cover this cost.

Granted, you should have enough contingencies to cover all your bases.Why try to find a loan for emd?