Insurance paid claim.  

I work anywhere between 20-40 hrs. a week at an average of $12 an hour, with the only 'overhead' I have being car insurance.

insurance estimated to be around $25 a monthRepairs estimated at $100 an monthCap X I put at $200 a monthand I included property management just in case i decide to go that route at $170 a month.Zillow says the mortgage would be about $188 a month That would put a total of $1003 a month in expenses and 1200 a month in rentcash flow would be $197 a month if all the calculations make sense.total cash needed would be $11,880. 

Often times the mortgage insurance is lower, and it allows you to buy a more beat up property that might actually be a "good deal". 

Some good advice if I may is to have a really good insurance policy that covers rental loss, and 3-6 months of full expenses in each of your rentals bank account.

Insurance: you have $50/mo = $600/yr.  

Best bet, if you’re motivated, search, or have someone knowledgeable search the all the recorded documents, mtg, foreclosure action, etc.  

Should I have our attorney draw up an agreement or other document?

You will at least see the filings/events in the foreclosure action, you may can read the actual documents online.

Insurance industry.