Typically, the same applies to LLCs where you and your spouse are sole members.Actual Lenders Title Insurance states;CONTINUATION OF INSURANCEThe coverage of this policy shall continue in force as of Date of Policy in favor of an Insured after acquisition of the Title by an Insured or after conveyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.

And even having health insurance doesn't buffer consumers against financial hardship."

Qualification for a Portfolio loan would be based on how cash-flowing the property is, so make sure to have a solid idea of gross rents received, along with the expenses for the property (including taxes and insurance, maintenance, landscaping, any landlord-paid utilities, etc.). 

Here's a summary of the economics.They purchased the property for $280,000 in 2004.The loan balance is about $178k.Monthly principal and interest payment is about $1,265 with $709 currently going to interestProperty taxes are $4,116 annually and insurance is $1,000.Currently the house is vacant for the sale so there's no rental income.Therefore, the monthly burn is -$1,135 (ouch).For the sale:Property was originally listed at $335k and they received 0 offers at that price. 

Does anyone have advice on next steps on how I can proceed with my situation?

What type of insurance should I buy under this condition?

The insurance company is going to rebuild all the units due to the amount of damage, but there has been some hold ups with the county due to permitting, changes in codes and such that has delayed the rebuild process greatly.

I am still learning the ropes of real estate investing, currently i have PM that manage all of my rentals, but i have been looking at trying out self managing recently after listening to some podcast and readings. One...

You can deduct prepaid interest, insurance.

I did not think you did either but I am pretty sure you do.and in Oregon you don't need a real estate license but if your buying a property to resell IE your not owner occupy you for SURE need a developers license.. and to get one is simply a fee and you need a bond and insurance.. so we cannot make a blanket statement that its legal In all 50 states.. to buy then resell..