It is a little overkill but they are asking for 2 layers of 5/8 type X gypsum (sheetrock).

It may seem like overkill, especially if you end up partnering with someone you know well, but the last thing you want is a bad situation that is only made worse if you and your partner don't know how to properly extricate yourselves from it.

Your numbers seem pretty conservative, which is a good thing: you're counting management at 10% and maintenance at 10%, which is a bit of overkill because some things are counted in there twice.You and I just spoke on the phone, but I'll put it here for others' benefit as well: the best way to tell a vacancy rate is to go by the building's history, in my opinion.

If your policy already has $1M limit, the umbrella might be overkill until you start adding properties.Again, I’m not a lawyer, but if the idea is to protect your personal assets, if you have your properties set up in an LLC, and that entity is properly insured, why would anyone need to come after your personal assets? 

The comments above are correct, it's likely overkill, but seek professional advice. 

My question is; should I save all receipts of purchases for the house (vanity, toilet, dishwasher, flooring , materials for adding value to the house, etc) or is that overkill?

I’m not interested in the $20K groups as I feel that’s overkill for me.

I'd agree software is probably overkill at this point especially if you live next door.

Is waterproofing and sealing crawlspace overkill?

Make a PDF or JPG of a screen shot showing the time sent, and probably a hard copy print out wouldn't be a bad idea either-- all of this is likely overkill, but not bad practice for "just in case".