When I sent the letter stating why i kept their entire deposit I would itemize everything to show that they owed a whole lot more than what I am keeping. 

I personally would want full replacement cost coverage for the full value of the property, so if there is a total loss i would be able to rebuild.

@Ned CareySo true Ned about the replacement of a furnace or other items. 

@Jay Hinrichs - 😁 hope all is going well for you.Like you I don't do seconds Mike,,  I know the BK judges have ultimate authority.. but did not realize stripping the seconds was common or very common.. what I see on huds were I am doing new originations of distressed assets is the second taking 2k to 5k when they were owed 50 to 100k.. so I know the loss's are real in seconds ergo not for me.. 

Originally posted by @Jeremy Marek:Even if you did try to go after a renters insurance plan, you would give up your right to recovery under your own insurance which would likely be a much better policyThis is absolutely incorrect - you can file against multiple policies, but the payout from all of them cannot exceed the actual loss. 

How do I know things like the cost of water and sewer, loan points, ARV (without an agent to pull comps), Capital Expenditures, or any other number of items without fully engaging the seller? 

That means if you have a flood, you will be paid a % of the cost to fully replace items such as flooring, etc. 

Get the timing wrong and you are looking at a downturn and loss of capital, at least on paper.Adding value is key to giving yourself the best possible opportunity of your investment making you money.

In my mind, risk involves possible loss of principal, down-side involves the hassle of work that I will need to do to to protect investment.

Structural & functional items usually need permitting (framing, roof, electrical, plumbing, etc), whereas flooring and landscaping do not.