Sorry, I am not trying to sound negative, but that is just the facts laid out in your description.

You're asking some pretty broad questions outside the usual scope of BP.

But they usually do like 70% LTV which wouldn't work if you still own 280k on it.

In both cases, there are usually contingencies in the P&S that let you get out of the deal if the inspection is not satisfactory or you can't get "conventional, market rate" financing. 

It’s your contractual obligation usually says it on the Declarations page of your policy. 

We also wire double poled thermostats to the units as these on the base units usually become defective after some time. 

Each of my properties provides me $2,000,000 in liability damage, plus loss of use Income, and the usual coverage for typical stuff.

Yes, assuming you've created 2 separate units it's usually a zoning violation at the least.

When people mention the "1% rule" you usually want to consider 1.2-1.3% as a better rule of thumb before you dig into numbers on a specific property in Allegheny County (IN case you don't know what I'm talking about: https://www.biggerpockets.com/blogs/7325/46689-the...)The taxes are higher than most areas.

The mechanism for avoiding double taxation in these circumstances is usually a tax credit for taxes paid to another state.