A contractor told me if the renter burns down the house with his hot plate, the homeowners ins won't cover it because he shouldn't be there in the first place....I want to be covered all the way around..

I see novice flippers burn bridges with contractors all the time by trying to get them to come look at 5 or whatever amount of properties they dont own to give them rehab estimates.

I have been burned by allowing customers to purchase their own materials from their own vendor.  

I had $8,000 and a burning desire to do a deal.  

You'll be completely unprepared for when something unexpected and unwanted happens (which it will).  

I have had a similar experiences in the past however most out of town tenants today will spend more time vetting the properties since some prospective tenants have been burned and some landlords too.  

Thank you for the suggestions @Travis, I guess it's a good thing I didn't burn that bridge just yet.

Two weeks after this one closed the title company finally got the title updated for the fire-burned house and that one closed and I collected another $1,900!

I bought my first house seven years ago and have managed to neither burn it down nor have it foreclosed on. =)

I'm assuming he permits the rehab to begin with.During the foreclosure process the house lacks insurance and it burns to the ground making the asset not worth foreclosing.