In addition I will not raise the rent this year.Do you think this is a good plan? 

Surplus would go to the HOA and if there was still additional funds it would go back to the owner/borrower. 

This policy will provide additional coverage above what your existing policy covers.

In addition, the Dallas market is about to decline significantly.

about 5 years ago, i completely withdrew my 401k to invest in real estate.I have no regrets.I paid the income tax and 10% penalty.The withdrawal allowed me to invest in real estate earlier and get real estate investment knowledge faster.The appreciation and cash-flow that I received from the rentals > 10% penalty, income taxes paid, appreciation that would have grown in limited selection of mutual funds.I now have complete control of the funds.Best of luck in your decision.

Understanding and taking advantage of the variety of tax credits boosts the return on your property and allows you to be part of the move to conserve our nation’s historic treasures.When rehabilitating or investing in the rehabilitation of an eligible historic or non-historic building, you may be able to take advantage of one or both of the historic tax credits: 1) Historic Tax Incentives and 2) Historic Preservation Tax CreditsYou can receive a federal income tax credit equal to 20% of the costs associated with rehabilitating the building.

Additionally, when I cancelled, Peter could care less.

@Don Konipol in addition to what @Chris Seveney said, also there is the financing cost. 

He’ll continue to receive cashflow and depreciation. 

The way I got around it was I had capital that I could use to payoff the load and then the bank issued a new loan for the BRRRR amount, which I then got my capital back plus the additional capital based on new ARV.