Make it clear that he is responsible for insuring the rent is in your hands no later than midnight on the first of each month for the entire monthly rental fee.

Here are my numbers as it sits:Income:$2600Expenses:$650 - (vacancy, repairs, cap ex, management)$250- taxes and insurance$180- owner paid utilities$300 - my cash flowTOTAL: $1380Left to pay monthly mortgage: $1220So given these numbers I can still get this thing to cash flow, and if for some magical reason I could ever get the city to change the rental license back to save the integrity of the property, this would be a home run! 

Do I include the Taxes and Insurance (that he's currently paying?)

What is the yearly cost of insurance?  

I currently work full time as a Insurance agent.

Beyond financing this deal, better credit will save you on insurance costs among other benefits. 

His health was declining due to cancer and he'd called one of our "We buy houses" ads, wanting us to buy.  

I'm thinking about putting my rental property with the same insurance company that I use for my primary residence so I can get an umbrella policy from them.

Is it possible to have General Liability Insurance to cover me in case one of the tenants gets hurt.

These include loan payments, taxes, insurance, utilities, lawn care, and any other costs that occur during the Rehab period up until the property is fully rented.