I did take the liability coverage in the insurance but not upto $1mm, I will certainly do more research on that.

Sorry to hear...If the property is vacant, it is more difficult than ever to garner coverage that includes theft.

many insurance policies have the option of code compliance coverage in the case of an insurance claim.

Also will the commercial policy from all these companies have similar coverage?

We were unable to determine there were any unpaid contractors floating around, so paid for the extra coverage.

To the extent reasonably available, the Association will maintain property insurance insuring against all risks of direct physical loss commonly insured against, including fire and extended coverage, in a total amount of at least 80 percent of the replacement cost or actual cash value of the insured property as of the effective date and at each renewal date of the policy, for the individual Units, for insurable Limited Common Element improvements, for insurable General Common Element improvements, and for insurable Areas of Common Responsibility improvements, but will not maintain any property insurance for alterations, additions, improvements, and betterments made by, or acquired at the expense of, and individual Owner or a Resident to the Owner's Unit, a Limited Common Element improvement assigned thereto, a General Common Element improvement or an Area of Common Responsibility improvement."

I've never used the following website but it says it has the real property records for Harris county from 1961 to current http://www.texasfile.com/texas-land-records-coverage/#county-clerk-records

# of Units32Rent per Unit$485Gross Rents$186,240Other Income$0Gross Potential Income (GPI)$186,240Vacancies Assume 10% vacancy rate $18,624Effective Gross Income (EGI) $167,616# of 4-Plex8Price/4-Plex$120,000Sales Price$960,000Acquisition Cost Assume 20% down pmt + 5% other$240,000Property ValueNOI/(Desired Cap Rate)$931,200Operating ExpensesRule of thumb is 50% of Gross Rents (assuming tenants pay utilities) $83,808Capital ExpensesUnknown (owner says 0$)$0Net Operating Income (NOI)EGI - Expenses$83,808Debt Services$75,396TaxesAssume 1.25% of property sale price $12,000Insurance Assume 1% of property sale price $9,600Net Cash Flow-$13,188Debt Coverage RationNOI/(Debt Services) 1.11Capitalization Rate (Cap Rate)NOI/(Sales Price) 9%Gross Rent Multiplier (GRM) 5Cash-on-Cash Return (CoC)(Net Cash Flow)/(Acquisition Cost) -5%

Assuming you are doing a typical knock down, which is Not 100% coverage(there are small spaces between the new "blobs" that are knocked down) the small void/flat areas will show the old orange peel on the old walls.

@linda@Linda Lin You should be worried if the borrower can cash-flow both liens.The debt service coverage should be at least 1.25