(No money out of pocket)$14,256/month gross rent (master lease so 1 rent check a month)Estimated Monthly Net $7840/month Estimated NOI $94,089Cap Rate of 15% give or take a littleInitial Cap Rate prior to the plumbing issues would have been 17% Cap Rate - Did I say But It Right?

If you bring the loan current in time, usually 7 days or so prior to the sale, then yes.

Am I covered for situations like this where a tenant might sue a landlord through my normal home owners policy typically?

The pipes were stolen prior to contract resulting in water gushing inside and wet carpets etc.

Our policy is to give a new tenant a clean place and expect it back clean. 

If you really want to protect your assets, there are two things far more important than an LLC or even an umbrella insurance policy: know and follow the law, and treat your tenants honestly and fairly.

It's too late now but it's important to educate tenants prior to occupancy that noise travels between units, particularly from the upper unit into the lower.

Have YOUR attorney (real estate deals always have attorneys in PA) look up who was the owner prior to your purchase. 

Policies vary and you need to know what your state law requires. 

Purchase price: $196,000 Cash invested: $7,000 Prior to being introduced to the forum, I unknowingly house hacked my first/current property.