On some policies this is an optional coverage, on others the standard policy starts at $10,000, but can be increased. 

Anecdotally, I've heard that local Facebook marketplace groups are an increasingly successful channel.

Should I get more cash flow from day 1 but have a lower CoC return (~$200/month NOI with about 20k left in the deal)ORShould I BRRRR and try to get all my money back out of the deal so I can increase that CoC return, at the cost of the monthly cash flow (~$10/month NOI with zero left in the deal)?

If she is complaining also of headaches, has red rosy skin (mostly in face), or increase in fatigue you might want to mitigate a potential law suit. 

When interest rates increase demand eventually declines, but we're still in the fear of missing out stage.

In that time, we moved, kept it as a cash flowing rental and the property has increased in value from 85k to 200k.

Would you ask for a non-refundable pet deposit and increase rent or just one or the other?  

By doing this, you will hopefully have increased the value of the property in excess of your purchase price plus the repairs you put into it. 

My project manager/mentor was advising me on the deal and kept insisting that I should gut and remodel the entire place because its value will increase tremendously.

We can afford to eat the mortgage payment, but would rather not of course considering we started down the REI path to build wealth and increase cash flow, not dent our wallets.