For insurance, yes, having umbrella liability would be desirable if your asset can support the additional OPEX (operating expense) without significantly impacting the financial returns you and/or your investors desire. 

But your desire to do a 1031 really doesn't impact the situation negatively. 

Given it would be 30-35 mins to downtown in off-peak hours, is it still desirable rental friendly area?

However, began to notice that is a split on whether open or closed is more desired. 

The LEAST desirable of apartments.

For that low of a price point, you need to start by getting a great deal, then put in the least amount of work to make it desirable.

Based on the responses I am getting, it is safe to say I am now leaning more towards a house outside of an HOA community in a desirable vacation area for STR purposes.Most of my funding to start will more than likely be lender financed.

If your desire to go out of state into other markets, just get your team refined because dealing with value-add MF without a pulse on contractors, timelines and connections is a nightmare that just costs you. 

Maybe you need to work in a full time job for a while to realize what your real desire is.

Some rental pools are more desirable than others.