Education is probably the key.Going forward knowing the answers to her concerns - and the ones she hasn't thought of yet - will go a long way toward understanding what REI is and what it isn't.Fear defeats everyone who lacks the knowledge to overcome their fears.Right now, of course, she's right: going into REI uneducated is an unwarranted gamble.

It did sound like the realtor thought the owner could just continue his insurance with me making the payment, but that would be concerning in case something did happen as i would not be the person listed as insured.Another thing to consider in this is that the seller is 80 years old and I believe there is likely 18-19 years left on the current note terms. 

My concern is that If I did have to finance, some of the same properties wouldn't.  

---My concern is what if tenant pays rent during eviction proceeding.  

Perfect opportunity to rehabilitate and possibly put it on the market for profit.Regardless of cause of fire, no insurance company want to do business with you for awhile.

Looking at the deal, I have two main initial concern/opportunities I don't have much experience and I'd appreciate any input/advice:seller broker marketed implementing Water RUBS as one of the upside (actually factored into NOI proforma in which asking price is based on).

I guess it only takes one bad apple to cause a problem, but I have not had an issue yet (knock on wood).I’d leave it alone and reconsider later if it does become a problem.

Basically in a nutshell, leveraging equity to buy properties is good but too much leverage can cause dead equity?

As for the law cited above..... your concern would only apply if you took individual checks on the deposit originally.

I don't think we'll see runaway inflation like we did in the early 1980's, which caused Prime to spike.