But I have to ask, is this unit attracting this kind of tenant? 

Will hard money lenders lend on something of this size?

This is the reason I made this post.

But you didnt have too much room on this one in the first place.

I purchased flood insurance on a Zone A property in July this past year on a house that had previously flooded. 

Speak to an attorney to handle this.

If you rented this home and it was putting $3K positive cashflow yearly in your pocket, the returns would be 3/4=7%.  

Hope this helps. 

@Tristan Kelly hope this goes well for you!

the ONLY true way to reserve for sub to melt down is to have the money in the bank to pay off the offending mortgage full stop any thought of trying to refi etc is just wishful thinking sellers credit will get hammered while you go through the process.