The policy was $2200/year ($1.1M Bldg coverage and $1M Business liability coverage in this apartment LLC) and I haven't had a single claim in my past 5 year history.

That is just not realistic.To illustrate this.. lets run this experiemtn.Imagine me giving 4000 people, that same list of 2000 contacts... what your claim then states... that pretty much 4000 people will all make a deal from 2000 leads.So 2 different people make a deal from ONE single house.So that too is proven wrong.So the way THEY told you that claim is completely wrong, and logically impossible.

For example, I have a subject property that has 1682 SF on the main floor and 810 SF of finished basement (the majority of which is about 8 feet in height with the exception of some bulkheads to hide the mechanicals) and 271 of semi-finished basement that is a utility room basically (washer/dryer, freezer, hot water heater, furnace, some storage).

If its a single family home its a far simpler analysis.

If I remember correctly, there is a provision for properties with Fannie and Freddie loans to be moved to single-member LLCs after 12 months of seasoning if the only member of the LLC is the owner/borrower on the loan. 

From a practical viewpoint, I wouldn’t think the lender would accelerate the note, if the LLC were a single member LLC, you were that member, and it was treated as a “disregarded” entity for tax purposes.  

If they qualify as tenants, you might need to honor tenant rights or negotiate a settlement to vacate.Market Potential: A two-family home and a single-family unit could be a great income-generating property post-rehab or resolution.

I only have experience with regular single-family homes as STRs.

They sit on their *** for 2 months, not a single bite. 

Similarly, the sale ($575K) minus your adjusted basis determines your capital gain.You may qualify for the primary residence exclusion (up to $250K single/$500K married) if you lived there 2 of the last 5 years.