With the purchase, the rehab, the closing costs and the holding costs (hard money, taxes, insurance, utilities) our all in is around $200,000, but we have created $40,000 in equity.

You mentioned gross rents of $3400 per month and Principle/Interest/Tax/Insurance of $2500 per month. 

Quote from @Nicholas Dillon: I read somewhere that you can request to have your mortgage insurance dropped once your Loan to Value reaches 80%.

E&O insurance, MLS fees, electronic lockbox fees, association dues, contract fees, every software agents use.Many of these fees could be close to doubling by the end of 2026.

I would get the insurance in my trust name.

With an 8% mortgage rate, they would pay more than $650k in interest.One major problem for both buyers and owners beyond mortgage rates is the rising cost of property tax and insurance.

The cost associated with insurance for not having 20% is peanuts compared to what you potentially can do leveraging your down payment. 

2) Their contractor must be properly licensed and insured and we require copies of all this.

If you can rent it for enough to cover the principal, interest, taxes and insurance and still put money in your pocket, plus cash flow on the property you're purchasing, that would be ideal.

Insurance is awful.