CAPEX should cover some of it if you budget well. but like others have mentioned if financed, You WILL have to get insurance in all situations

The prior response should give you a thorough view of the options that are available but knowing which one to use depends on your particular situation and how creative you can get.The reason for this is because everyone is in a different situation or tax bracket.

If so, how could one benefit from these kind of situations. 

FHA is attractive to her due to the down payment size.So here is the situation;Kat has known Marg a while, and is getting a good deal on the house. and by FHA request, she has been living in the house for 6 months before they will consider the loan.

This is a situation where working with an experienced investor friendly agent can help.

Here are my thoughts on you situation.  

But not an alarming rate.  

I am looking for some advice on how to handle this situation.

If you're in a very competitive market you may want to get the house staged (filled with furniture) for marketing purposes.If you must list it in such a way as to disclose the address (for example you list it with an agent as a rental) please spend the extra $15-20 bucks to install a simplisafe alarm system: this is an inexpensive alarm system that works over 3G cellular networks.

I'd like to explain my particular situation: I'm not here to make big money.