Its covers a HUGE area and several counties.

Would a lease option saying I just cover the property taxes and property improvements for him work?

Fortunately, you have the security deposit if it comes to that point to help cover some of the costs. 

My question falls on insurance for the Dwelling - should this cover the entire appraised value of the house?  

@Tyler Crawfod, our BP colleagues have pretty much covered most if not all ways to make a situation work. 

There's a lot of discussion around partnerships, private lending, and hard money, but I don't see much discussion on the actual mechanics - what these arrangements look like in practice.My hope is this post can serve as a reference for those starting out, so we may get a better understanding of how these strategies are actually implemented as well as an ability to more accurately predict the profits and returns you and your lenders and partners can expect.If those with more experience would like to revise these numbers and statements, it would be most appreciated.These scenarios assume you, the flipper, are bringing none of your own capital to the deal.Typically, this would mean 1 of 2 scenarios...Private Lending - Someone you know brings 100% of project costs (purchase, rehab, acquisition costs, holding costs) to complete the deal and in return, they get a certain percentage return which comes out of your profit.Hard Money + Partnership - You get a hard money lender to cover 80-90% of purchase+rehab and a partner to cover the remaining 10-20% as well as acquisition costs (including hard money origination and points) and holding costs (including hard money interest payments).An aside about the structuring...Private Lending - A promissory note is created, and your private lender lends to you or your business. 

R&M / Capex : The building appears to be in okay shape from the pics but one heavy turnover can easily cost $3-5k or more.

If the buyer's payment is at least enough to cover your payment and taxes and insurance, you are good to go.

Don't forget about utilities (if you plan on covering any.)

I believe Civil Court in Marion county covers all evictions but I will do some research there for sure.