This is all I can afford and want to get a portfolio/equity going.

Any insurance in FL, especially wind is likely not going to be cheap.Look for affordable coverage that will also bring you great value if you have to make a claim.best of luck

My current loan guarantor is working to get his affairs in order because of health reasons and would like to be off as the guarantor. 

On the other hand, the economic factors like interest rates, affordability, and supply could make the sf home only increase in value in the short term. 

I can't afford to refinance it into an investment type loan because not only will it be more in interest rate but also my down payment has to be a lot higher and my monthly payment will be higher in which case I can't cashflow.

However If you can afford to do that, that works too! 

In the worst case scenario with a ban, the property wouldn't cash flow that well (a few hundred negative).I am comfortable with that considering this scenario still cash flows better than most other housing arrangements I could afford in this market.

There are so many renters that claim they can afford something but then their plan quickly falls apart. 

However, could this be an opportunity to make buying a home more affordable?

Almost all of them either went out and bought properties that they could personally afford to start off or they invested with another GP and asked tons of questions to figure out what to do.