So if it is 10 years (making up a number) and the unit was 2 years old and a new unit costs $5000, you bill them for 80% of the cost-$4000. 

This leaves us with a little over $1000/month for our housing costs split between my wife and I. 

"the typical home warranty costs $450 annually, and only 25% of premiums are paid to homeowners.

If it cost you $100-150 per month it will be well spent money.   

renter sucked...didnt pay.... cost me a lot of money blah blah blah.

So you will have to consider all these things and their costs, along with any other renovations you will need to make for your potential property, and the prices that go with those as well.

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

After closing costs, agent commissions, etc... my net profit was $52,000 How did you find this deal and how did you negotiate it?

From what I"ve researched it sounds like quite an undertaking and costly if you want the approval to rebuild on the soil. 

From Cope Equities:"This project is already begun – no risk of it not starting – it already started, a $44 million dollar project ($29 million in costs, approximately).