I'm leaning towards a HML and then funding the Rehab work out of my own pocket on the front end ( Material costs only ), but still having the cost of the materials financed into the HML on the front end of the deal and getting reimbursed the costs for materials when I refinance into a 30 year fix.

Is there a possibility to get reimbursed for closing costs or anything of the kind, or would I just eat all the costs and be glad that this fire did not happen while I was the owner? 

The lease also states that the landlord is in no way obligated to reimburse them for those repairs, but may do so at their sole discretion.Does it happen much?

Personally, I'd figure out what the whole situation has actually cost you and reimburse them the rest.

If you do pick one up make sure you get to choose your own contractors to complete the work, you pay contractors up front, and get reimbursed after the fact. 

They then allowed a 15% 2nd from the seller which reimbursed some of my downpayment.  

@Laura Schumacher - Louisville Water will reimburse you up to 50% for abnormally high bills if you give them a receipt/invoice showing that you fixed the problem. 

Even if triple net and tenants are obligated to reimburse expenses per the lease larger ticket items often you have to put on a payment plan as the tenants cannot pay all at once.

You can always cancel it if he ever pays.Going forward, make sure your lease provides for the reimbursement of your fees (attorney, process server, court) associated with the reinforcement of the lease terms (including, and especially the non-payment of rent).Good luck!

Some don't have flood, loss of rental income etc...The tenants should have a renters policy to cover their own belongings, your policy does not cover their items.If you have loss of rental income, your policy will pay reimburse you the amount of rent you missed out on until the property is back in habitable condition.You will need to make a claim  on your own insurance first.