Or alternatively if the owner walks away, and the bank decides to sell the NP'ing note ... does the insurance coverage convey with the note since the bank presumably required to be listed as additionally insured on the flood insurance policy (if the property was in the flood zone and one was required)?

Mark, this might be a good way to  start your self-employment.

That is in addition to your rehab budget.

Our contractor earns 15% plus an additional 5% bonus if the property sells for 40% or more of the amount invested.

In addition, depending on where you buy the schools could be pretty well rated.  

Additionally, If this ends up in court, I would not want to try to explain to the judge (or anyone else) why I kept 6-months prepaid rent from a victim of domestic violence.  

@Katie Haney I agree with @Brian Ploszay on the point that there will be some additional costs associated with the property at that price point in terms of repairs.

I would advise that you get some additional info:- what type of damage (wind, flood, fire, etc.)- what coverage do they have      is there coverage for flood?

I think state filing and additional partnership docs were about 450$

In retirement, real estate will be pretty much your only available tax write for what I anticipate to be significant income when you combine ss plus your 401k and other investment streams etc.I look at my businesses as additional cash flow that help to accelerate my rei and do not count on that cash whatsoever to live.