After I submitted the offer I found out that I need flood insurance.

In many ways, it's good to have strict rules in place because some owners aren't properly insuring, paying the right taxes, might not get business permits or simple things like fire extinguisher inspections. 

It would cash flow around $700/mo after taxes, insurance, and deferred maintenance.

Stop issuing 1099-MISC with box 7 "non-employee compensation" instead of box 1 "rent"Stop including refundable deposits in rent incomeProvide annual reports clearly delineated by propertyLearn the difference between maintenance, repairs and improvements and report accordinglyReport insurance reimbursements separatelyProvide supporting documentation: itemized contractor's invoices, insurance adjusters' reports etc

I had good relationships with my Realtor, insurance broker, and contractor.

And he misses out on all the benefits of it being owner occupied, like tax exemption from capital gains because he doesnt actually own the property.I bet he isnt properly insured on the property either, because if he insured the property in the llcs namr, the lender would have been notified of the change in coverage.

Good afternoon,If a tenant fills a claim does it always go to the owner s insurance or is the Property managers insurance also responsible ?

They are instructing the homeowner to contact their title insurance company and file a claim so that the taxes can be paid, and if you don't have title insurance or the title insurance refuses to pay; you're SOL and have to pay the back taxes and maybe interest also. 

They should be able to tell you if the note is enforceable with the state's standards.

I would imaging it would be much higher than a standard build.