Regarding my second question, you're right, I think doing a title search is my next step in order to insure that their is indeed a good amount of equity.Sal

Here are the rough numbers on one of the houses, both are similar:Total investment (acquisition, remodel, carrying costs) - $200,000Current value (after netting out selling costs) - $270,000Potential Rent - $1,500/monthI can do a refi and get my $200K back out of the project, that leaves me with a mortgage payment of $1,400 including taxes and insurance (assuming 30 yrs. at 5.5%). 

Also, on flood insurance, i'm finding quotes ranging from $600/yr to $1,500/yr but not clear how that works within the different flood zones and asset types.

But things get more complicated when a lot of these people renting out their basements illegally are also not paying taxes on the income... and then theres Insurance & liabilIty Issues as well. anyways, I personally am trying to find a way to do things as legally as possible.

At $89k ask, there are $5,500 in closing costs ($1,500 of that is tax prorations) and then $2,100 in prepaids (insurance/taxes).

Sorry it auto-corrected your name.

@William Larson Make sure your insurance policy covers your complete annual rental loss.

I liken it to hurricane Katrina and New Orleans, a lot of people tried to leave but cars that ran out of gas and numerous auto accidents blocked the freeways.

How did you research and evaluate those "costs" of leaving the corporate world, how did you find health insurance for you and your family, etc? 

The bank will find out when the insurance policy is updated.