My insurance company said they wouldn’t cover the policy with the fuse.

They've figured out how to take advantage of the warranty policies to benefit themselves.

Is it better to purchase property as Vacation Rental STR, and then decide to switch to Long Term Rental if the regulations become more strict?

Obviously they are running against the zoning policies, always feel like doing something in the gray.

My gut says you probably want/need separate policies for the different entities at the very least - the purpose of having them is to keep things separate in case of a lawsuit, so combining insurance would pierce the veil and allow someone to come after everything. 

Some HOA's are super strict (especially in neighborhoods built in 2010 and newer) and some have zero regulations.

At best it sounds like you broke even and made the money strictly through principal paydown with no appreciation above your costs unless you had some pretty good cash flow. 

But strictly going by the numbers, it's borderline OK, depending on the type of market.

This isn't a bad thing if that fund raiser is doing strict due diligence on the sponsor, has done multiple deals with them, etc.

I would assume your brokerage would not be able to afford to pay for the E/O it would cost you Most E&O policies will pay out 0%, or cancel altogether if 25% of the transactions are dual agency.