The most IMPORTANT part of ALL of this is to make sure you are working with a loan officer that has the experience and know exactly where to take your loan to make sure you can  ADD back expenses or the LO runs it up the flag pole upfront with the lender to get the green light.  

Or maybe even just focus on properties with a very light rehab?

I was confused until I was finally able to take a trip back to CO to walk the property and see light fixtures not cut in right, and trim unfinished, etc. 

Can any experienced Biggerpocket users shed some light?

Mark Robbins of Lending Resources Group saved unknowable amounts of time, energy, and frustration helping me quickly find a bank that would bundle all 3 homes into one loan.

Can anyone throw some light on whether insurance company pays for the property damage (with basement rented) if there is a fire or not?

$5,000 - remove wall$1,000 - paint kitchen cabinets$3,000 - paint $1,000 - remove paneling, repair drywall$1,000 - new light fixtures and bathroom fixtures$2,000 - new countertops$2,000 - new appliances$6,000 - new flooring (laminate, carpet, tile)$1,000 - new garage door$1,000- paint siding$3,000 - contingencyTOTAL Rehab - $31,000Those are just things that are obvious from the pictures.

What you should be looking for (again, my opinion) is something that is a light or cosmetic rehab that doesn't take months to complete, the market is good with low days on market.

Canless lights (for example) are easy to install and seem very popular over traditional lighting and can be purchased in groups from ebay. 

There is always a better loan out there somewhere, but relationships is where I focus my energy and I am grateful when my clients reach back out when they have subsequent deals.