A couple questions I brought up was how can we protect it for them loosing to insurance companies or medical (nursing home) with declining health?

(a) If a condition results from an insured casualty loss, such as fire, smoke, hail, explosion, or a similar cause, the period for repair does not begin until the landlord receives the insurance proceeds.

This ended up costing around $25,000 (not including loss of rent during this time).The painful part of this is that at least as of right now, his insurance is saying this is not covered as part of his policy.

The margin remains stable over the life of the loan.

It cost money to insure, in some cases bond and carry the liability of a job taken.

Has a small unrenovated 1 bedroom in upstairs rear, rented for $900/month (tenant pays own gas and electric), wonderful stable tenant.)   

I am already licensed and insured as a contractor so that I can pull my own permits.

The house in question is in a very desirable and stable neighborhood and rents fairly easily.

Are you also doing a title search with title insurance? 

Some people like to use debt to limit their liability while other like to eliminate debt as quickly as possible to insure as little money as possible gets paid out in interest.