I believe one of the first roadblocks is when the bank appraiser discovers what you found out (non-conforming zoning), they will not lend on the deal. 

Thus creating new bank account and cards is required. 

Most are reluctant landlords (like me) but then I guess that's better than the absentee landlord  :-)Keep up your spirits and surround yourself with positive people because another the rent day is around the corner and you get to smile on your way to the bank.

And that's why you can manage to get great return on you investment even if conditions are not ideal (i.e. cash neutral property where bank debt is still being paid down). 

The answer to your question is risk.Did you ever notice when you really need money, banks say no, but when you've got money they're looking to give it to you? 

If you cannot obtain these from the seller, then you will either need to construct them yourself from piecing together bank statements and receipts (sounds fun right?)

Personally, I hold properties in an LLC (all banking is done with a separate checking account in the business name) and insure for roughly what you have in your first quote @ 100k liability and $5k medical.Not sure who you got your quote from but it seems a little high for the value of the property.  

I’ve had luck with two small local banks.

Given that the bank has not given out the full value of the loan yet given the 7 year time frame.

Though I would recommend talking to a local bank and accountant for there opinion on how this could work.