It's your choice.The best way I've found for insurance is to buy a new policy with you named as first insured, seller/borrower named as additional insured and lender named as mortgagee.  

You will want to obtain an Owner's Title Policy and you can get the CFD/LC endorsed by some title companies.  

Daniel,Chicago Title offers what they call a Hold Open Policy specifically designed for investors.

Finding a lender that will close without turning water on (hubzu policy) has been challenging to say the least.I read somewhere about some people just turning the water on in their own names (buyer name) for inspections/appraisals.

Isn't $1000 + 24 hours of your time a good insurance policy when buying something at $50,000 (just a guess on the price of the home)?

The city has a strict inspection policy and this place is up to code.  

Make sure you have a safety net in place and don't start investing until your personal situation is stable.  

Assuming you disclose the issues and a structural engineer gives you a letter saying place is structurally sound, then you should be able to process as you wish.BUT, don't cut corners when it comes to safety.

It's an exception in the Title Insurance policy, not Title itself, and becomes irrelevant when no longer occupied. .No need to clear all the standard exceptions for a title policy.

Thank you for the advice everyone.I am getting an umbrella policy for primary asset protection & set up a Wyoming LLC to manage the finances.