I'm not comfortable buying a property with a negative $500 cash flow hoping future appreciation will cover the loss. 

The rule technically is "2 out of the last 5 years," so in theory you could live in it for 2 years, rent it out for another 2.5 years, and then when you sell you would still be covered under this same exception.I am very passionate about real estate and would be happy to answer any other questions you might have.

IMHO a good system has a screen that shows all the payments in some ACH state:  queued,  bounced NSF,  paid. 

The rent you receive will cover the debt for the home you're departing from . 

I've lived here for thirteen years now and have been in the tornado shelter and or took cover maybe five times in those years and fortunately have only suffered a broken window amongst all the storms. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years.

@Stuart Udis covered this well.

If you offered them enough to cover their mortgage and closing costs, I am sure they would feel relief.

or an insurance company that will cover the liability for the property?

I am seeking insights and recommendations from the community regarding potential locations in and around Orlando where full duplexes might be more readily available within my budget.My plan is to house hack, and based on my initial calculations, I anticipate an extra expense of $1.5K beyond rental income to cover the mortgage.