It covers not only my rentals but also things like car accidents. 

That way you know that you are covered.  

In my experience most properties with structural issues are not discounted adequately to cover the cost to correctly remedy the problem(s). 

It is not an issue to borrow money to pay the loan, however, your mortgage broker may have an issue with you not have the necessary cash to cover any unexpected issues for a few months. 

I don’t have cash but I know I can get approved for a line of credit that would cover my down payment.

Will the deposit cover the unpaid balances, cleaning, and repairs?

That way your mortgage will most likely be completely covered and you can live there for free. 

Buy the land now and then sell off enough properties to cover the price of the land and then do a 1031 construction exchange to build on the property with proceeds from the sale of the properties?

Thank you to everyone who chimed in, this has been SUPER helpful.I've been able to negotiate returning half of the deposit with the tenant so I am going to bite the bullet and pay that out of my own pocket.Going forward, I'll remember this as a lesson to make sure this is covered (I'll definitely be buying more properties in the future).Thanks again!

My earlier post covered the rules for deductions overall.