Insurance being canceled due to the area and finding insurance for it.

The patent on the 30 year with taxes and insurance was 3900 or so.   

I think the best model, and one I'm currently working on, would be more akin to how insurance works. 

Sometimes they forget to tell you that many tenants in Detroit don't pay (depending on the property manager skill and the type of tenant) - but taxes are very high in the city and so is insurance. 

Though my property management company eventually took care of the eviction proceedings and repaired the property to prepare for a new tenant, I feel they were negligent in their duties.

This is not a great return, but not terrible.As others noted, there are other risks, like having the property insured at full replacement or purchase price, or if the option is 100% seller financing with no money down or very little, versus 20% traditional down payment, this can start to move it into a better investment.

Another idea that we have been exploring is using the cash value of whole life insurance funds for emergencies. 

Calculating these losses involves documenting the fair market value of the property before and after the disaster, adjusted for any insurance or other reimbursements.

It can be done ethically, but you need safeguards to confirm mortgage & possibly property tax payments made on-time, as well as insurance with you protected.- Also, you need a legal way to take back the deed if buyer defaults!

For insurance you often have to have a certain amount of access to get to furnaces, hot water heaters, and electrical panels.