The underlying principal of insurance is to provide indemnity for a future and unknown loss.

Also, if you have good tenants - ie they pay on time and dont cause issues - why would you boot them out and bring an unknown in? 

At a minimum be wary of venturing into the unknown of the hotel world (a declining asset in general though I suppose not 5-star markets perhaps). like anything else unfortunately, the best ways to find investments that actually make sense are to know people who you can trust who then recommend something for you--not just so they close a deal but because your particular needs are a good 'fit' for that project.

I have been considering a few buy and hold properties in some areas that I am not too familiar with. I am doing my homework on these particular areas and trying to pick apart each aspect of the numbers. However, I ...

Initially, we will use little, if any leverage, since we both feel that will eliminate a lot of the stress and unknowns of "new territory."

Told him to check the references at the downstairs coffee shop for verification, he thanked me and assured me that in their hometown in Missouri, it was a dangerous city, thus the concern.....I have no clue what they do in Missouri and I can't imagine it's what he thinks it is but it sure made me aware of how visiting an unknown place causes certain anxieties in people, mostly unfound but not always.   

Seller financing may be possible but unknown at this point.  

If there's a buyer's agent who is a jerk or who is totally unknown, we eliminate that offer.  

Also, unknown as posted is the debt service structure, planned overages and delays typical of rehab hurdles.

At this point, flood insurance rates are scary, and unknowns will likely be interpreted as a worst-case scenario.