This will show you more evidence of the fees they really charge.

Also, we filed a claim this year due to the hail storm in South Milwaukee so our roof was covered in that. 

If you can add a legal ADU at $25k in the Austin area then you should add it.  

He was a realtor based in the Midwest (I think the greater Chicago area) and was talking about off vs. on market deals and the importance of choosing equity over cash flow. 

This means you'll get a good cash flow, but appreciation of the property will be low.In the phoenix area there is more ownership and less renting, but due to prices increasing faster than inflation we are seeing a rise in renters.

I would recommend conducting a search and finding the opportunities there.

Even if the rental has a decent cash flow with additional flood insurance, we're still not sure we want to take on that risk as we are out-of-state investors (planning to move back to KY in the future, but not now) and we don't like that it will potentially bring down the perceived value when we try to sell it in the future.The seller has never lived there and has not provided any information on if it has flooded before or not. 

That makes me even more suspect but that is just me.

I want to know more about the area and build a team that can help me purchase and manage properties.   

You might consider hard money for the initial purchase or going with a DSCR type lender if you find something that is more turnkey.Hey!