I get MINIMAL insurance. 

Dad restructured her loan to help, but we've discovered she can't afford homeowner's insurance. 

also what kind of insurance I should need for the real estate involvement LLC ?

Just make sure they have insurance and you should be fine. 

Suddenly, my Insurance company (who already binded my policy on closing) is starting to at concerned and is asking A LOT of question such as who will manage the property?

If you finance the property you must purchase flood insurance, rarely or not doesn't matter if it's in the zone. 

You need to talk to your insurance agent about finding the right liability policy and umbrella policy.

Ideally would want to do a walk through this week or early next with a start from 7/16.We will be doing more flips this year so looking to start building a stable team of experts and this is an easy project to start with.If interested or if you have recommendation, please let me know!

Well you’ll need stable income to make this work.

but I will take a guess at what your askingif the developer is going to bust this into lots and you stay in you just lost your tax advantages and will be deemed a dealer at the highest tax rates.sell now no risk.. and best tax treatment you could 1031.if its one property and your saying should I partner and they are going to build an apartment on it and we will keep it.. that's different.. but you lose control because your now going to put a massive amount of debt on it.. all though in your area not too risky given market conditions.. and really depends on your developer  known, reputable and stable ?