Preferably, go for $1 million+ purchase price because you can get better agency financing.There would a lot of work to do finding the deal, performing due diligence, lining up insurance and various inspectors and contractors.

My original budget for insurance, utilities, rehab, holding all came out to $10,000.

Also I presume your construction business has all the proper licenses and insurance in place but if not, you will want to take care of all that as well.If you need names of any CPAs or attorneys in San Diego or Southern CA, let me know. 

It could have somewhat of a factor when getting insurance.

Taking into account taxes, insurance, vacancy, maintenance the profit is $316.

Do I need title insurance for the quitclaim process?

I can then also drop the insurance coverage to.

Title - Lender's title insurance $600 --> Do I have to pay this at closing?

Yes, your interest rate will be lower, but the Mortgage Insurance Premium (not PMI as many people often call it) is not only a burden, but a huge waste of money (basically paying the FHA's bills).

Insurance could run me about $80/ month or so.