For example, if you open a wall / expose and old wiring (specifically Knob and Tube) you must remediate all of it to get any insurance company to give you a policy.

However, the mandatory (since the home is still mortgaged) insurances (windstorm / hurricane mainly) escrows adds literally another $2,000 to their monthly payment.

While the gross income is $3k a month, you still have taxes, insurance, utilities, etc.

I will get $10,000 on the front end, $300 (minus insurance) monthly, and $40k on the back end. 

I am paying $55K, value ~$75-80K, insured replacement value $100K. 

The plus to these markets is that it would take something very major to change their policies.  

Zestimate is $315K.Cash flow won't be great for me since I will be taking an expensive loan at 7%.Expenses would be: mortgage+taxes+home insurance= $1300Management fee of $100 will be waived for the first year.There are renters in the place with a contract till June 2019 and they pay $1635.What I'm considering is that:Get the place, have little to no cash flow and when the renters contract ends in June 2019 have them out and renovate the place and:1. rent it out for more or2. if the market is higher/ home value is higher after renovation, sell for a profit.What do you think?

Unfortunately we have our own expenses such as bank payments, taxes, insurance and maintenance that require us to rent the apartment at the set price.

That might be something specific lenders are adding onto VA loans but it does not seem to be a VA endorsed policy. 

You can buy a home to live in using FHA loan, low downpayment with mortgage insurance.