2)   Assuming #1 is true, it seems the QI arranges a loan using the $1M proceeds as collateral, and the loan proceeds are given to me correct?    

. ;) -- and I expect to have enough equity in 5 years to put up my existing properties as collateral on a million dollar property with no money out of pocket.

The insurance company is giving you a loan of their money with yours as the collateral.

Yes you can secure financing which will be collateralized by your current SFR portfolio.

So earnest money is the buyer throwing down some cash as collateral, showing that they are serious about buying the property.

I would rather get a loan in my boss name, use our business as collateral which has decent revenue and then come in all cash to the closing table and do everything needed to be done cash in terms of renovations. i guess my next step would be getting a lender to give our business a loan.

Only other possibility is loans with the house as collateral that are not recorded.

You can use financing from a bank if you have a revolving line of credit or something like that, but a bank will not issue a traditional mortgage because there is not time for that and the issues with the title prevent the bank from using the property to be purchased as collateral. 

The problem was he wanted 2x the equity as collateral. 

If this is for an investment property, cross collateralizing other properties could work to achieve 100% financing.