PROPERTY INFO4 BR, 2.5 BA near Little Rock, AR$31,980 cash purchase (20% down, 30-year fixed)Property valued at $159.9KINCOME: - Rent: $1,295/mo (Year 1), with $50 monthly increase in Year 2 EXPENSES (Total $1,230.61): - P & I (30-year fixed at 4.75%) $667.29/mo - Property Management (10%): $129.50/mo - Property Taxes: $163.67/mo - Homeowners Insurance: $50.40/mo- Repairs/CapEx (10%): $129.50- Vacancy (7%) = $90.65RETURNS: - CoC = 2.42% @ $64.39/moQUESTIONS: 1.

.- More favorable loan and insurance terms for an owner occupied property.There are also downsides such as:- Less privacy- Blurring of the landlord vs neighbor relationship- Can be harder to be the "bad guy" on things because you see your tenants often.

i've yet to contact the homeowners and I'm pretty sure they would have insurance but if not would while selling this be a smart idea?

It really depends on the structure of the deal and the policies of the bank financing the transaction.In your deal, it sounds like you would be assigning your contract to the end user for a fee.

I suggest getting a big ole umbrella policy if you are concerned with liability. 

@Chris SanchezFinal numbers from escrow show P&I + Insurance is at $2900. 

the other thing if its  a owner occ type loan there could be mortgage insurance.. and most banks sell their owner occ loans anyway.. now if your doing what @Levi T. talked about and going after commercial assets.. this was possible years back.my personal banker was in charge of their OREO and I got the list every week.. and bought a few subdivisioins from them they took back .. but this is small commercial bank where I knew the owners of the bank personally IE president and head credit officer.. and my banker is in charge of all the loan officers... and has banked me 24 years.. so yes its who you know.bigger multi billion dollar banks doing owner occ you can pretty much foregeta bout buying those in todays market.they want as stated to establish if they get a mortgage insurance claim and or they want to maximize profits.. there is simply not as much hangover inventory.. and or they will then sell off notes.. 

Who is responsible for paying property taxes and insurance?

Other things I’ve heard of is using a captive insurance company, but that’s more for the big guys who make a lot of money (think 500k plus) or putting properties in a C or S Corp and paying yourself a dividend.

To cover myself I would like to put a policy on this property, something basic and will cover me.