But the values listed  look excessive to me.  

You always want to make sure your bidding on 1st lien( usually the mortgage) because then "normally" any other liens are not your responsibility and fall off from your responsibility(they can make a claim on any excess proceeds from the auction sale).If your title search shows the 2nd lien being foreclosed on, well now your caught in the middle.

Mold needs two things to grow: moisture and food.

>My investors have us build them properties for their passive high cash flow of 17%+ cash on cash return.we have had STRs since 1999 and all of them have total returns very far in excess of 17% annual.  

I have a feeling there’s moisture getting in between the walls.

I will see if the water company has a way to put some kind of alert in place, to notify me of a future excessive water usage.

It is likely that you will end up with a policy in the Excess/Surplus Lines (Lloyds of London or similar). 

Do I raise the rent and make $600 a month on passive income, keep the property and chance this home not appreciating much more bc of what's currently happening in Florida with excess amount of inventory sitting there?

While these companies can offer convenience, it's crucial to vet them thoroughly to avoid any unpleasant surprises like excessive fees. 

If the wall is not bubbling it's really hard to tell without a moisture reader.