I get an email informing me that one of the investments went bad, the company had to foreclose on the property and that I can expect an 87% loss of my total capital on that investment. 

Avail on the company's website: Link

This doesn't mean that you shouldn't be ambitious with your objectives, as long as you're realistic.I have years of experience with short-term rentals in Mexico but I'm not sure how useful that can be to you since I invest in beach markets where there is mass tourism and visitors rent for one or multiple weeks so it's fairly different.

It might be different jurisdiction by jurisdiction, so probably just need to talk to the Planning Dept.

The Exclusions From Coverage for a standard ALTA Owner's Title Policy provides:The following matters are excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys’ fees, or expenses that arise by reason of:4.

So hence the question is do I call my insurance company or handle it privately?

if so, is it recommend for me to get a different loan that will cover the remodeling or should I pay that out of pocket, or should I seek for a FHA 203(k) loan?

If you look at the macroeconomics in Columbus, you'll see exactly why - population growth, job growth, and tons of companies moving and developing here.

I am a hoping there are a few of creative investors in Hawaii that would be able to recommend a title company, an escrow company and an attorney that is well versed in creative finance deals in Hawaii.

(2) Are there any property management companies that can help us buy, finance and manage the apartment complexes and where can I find them?