Let's say a tenant suddenly moves out without notice and destroys the place.

The rule is a great rule of thumb, but I think its more analogous to a PE ratio in the stock market.If the market is moving up, and everyone knows its a growth market think Austin, or San Fran, the PE ratio for a growth stock will be high for a stock say a PE of 50, or the %rule will be really "low", say .5%. 

Average rent in these areas, as it's different than my SFH cities, ranges around $500-600 per month (let's say a 6 unit property).

As a rookie, I’m not afraid to ask stupid questions... so here’s one for you: what kind of insurance does a REI need for a rental (say a SFR)?

What would you say a fair price for this building is ?

I'd just ask them and see what they say. As

Like upgraded electrical, heating, ventilating, air conditioning, plumbing, ADA, etc...Where this comes into play is if say a tenant of one apartment unit sets his unit on fire, burns it up and now you have to go in to rebuild his unit. 

The young preacher figured he missed the burial and felt obligated to still say a few words along with a short prayer. 

Definitely listen to whatever he has to say! A

Not to say a person can’t make money from renting POHs.