Insurance companies want to fix it the cheapest way possible, and their goal is to minimize out-of-pocket expenses like this one.  

I believe a large amount of our ad spend was spent to advertise the program.

Do you think it's common for a tenant to sue for an amount greater than insurance can cover, then take your property or even your personal assets? 

Proportional leverage (like 27% LTV) isn’t specifically required, but if you don’t reinvest the full amount or fail to replace debt, the difference will be taxed as boot.

Often times they come back with a list of repairs that they would like to see to protect the home or mitigate liability. 90% of the time those items were on our list to fix anyway, and sometimes we even haven't done before we get the letter from the insurance company.

This is after covering all expenses and setting aside a certain amount for reserves to cover future expenses like capex or vacancy. 

Once a tenant is in and they sign a year lease, there’s not too much to worry about aside from the occasional fix here and there.

Even though the interest rates are high, it’s a great tool for people who don’t have all the cash to do a fix-and-flip. 

It will teach you so much, has the best financing options, least amount of risk, and will let you know if you want to be in this business or not. 

Perhaps we "buy" the house from them for the $328K balance to satisfy the lender and don't need a large down payment and then have a separate contract with them to pay $x per month until we've paid the full $172K amount.