Surplus would go to the HOA and if there was still additional funds it would go back to the owner/borrower. 

We are both inheriting a 12 unit apartment building and each of us is receiving an additional separate property, one is a single family home and the other is a duplex.

He asked them to add it to the loan and he would pay them monthly as agreed.

On top of that, there's a bill working it's way through the state to add an additional sales tax on real estate.

This policy will provide additional coverage above what your existing policy covers.

You timing might be awful though as we just finished one of the worst years so likely your account is down and then you would add another 30% reduction on what you pull out. 

Pulling Equity will affect CF in the short term, but may allow you to leverage into additional units adding cash flow & equity over time.

Assuming I could qualify financially (primary income plus FHA allowed rental income contribution from additional leased units), when I become the owner of the property, would that prevent me from using a FHA 203b to house hack a second property?

I had just received a 30k down payment from another owner financed deal and I wanted to get a “second home” and get some additional rental income.

It would convert the existing structure from a 2 bed 1 bath, to a 4 bed 2.5 bath, adding an additional 2000 square feet of space.