Then come the transportation costs, storage costs, and inventory upkeep w/ damaged or stolen items.

The homes were not very well taken care of, and after putting myself in my target demographic's shoes I backed off.  

Please advise on what you would do if in my shoes

If that HOA fee includes "T" fees, free golf cart, pool, sauna, tennis courts, clubhouse, a 34' slip at the marina and HOA limo service with loaded cable, parking garage, storage and utilities with trash service, you might have a deal!

Jon pointed out above, as you step into landlord shoes, you will have to qualify for both loans without the income from the investment property being considered.

Do you make people take their shoes off?

If I were in your shoes, I'd do this: How to Make a Million Dollars in Real Estate: A Step by Step Path:)

My insurance company is cancelling the policy on May 10th unless the exterior issues have been repaired (dry rot in a storage shed, peeling paint, broken window, etc).I am hoping the repair work will be done by then, but I want to have a backup plan.

The carpet is new, and they dont wear shoes on the carpet which is a plus ( unless this was a show for me ;).

Next time, either start the lease sooner and offer free days (as Jon mentioned) or write a seperate short term lease for the storage of the items, include a small fee like $25 and make sure the lease demands that tenant provide tenant insurance for the personal belongings.