They need to call the police and their insurance company.

A contractor’s insurance doesn’t pay for any of this. 

what happens if the buyer destroys or contaminates the property or uses it as collateral or doesn't pay the insurance etcCan I ask for other collateral?

Most of the proceeds from the new loan will go to pay off the old loan. 

So the numbers (so far) are:Purchase price: 62kARV: 105,000Buying costs: 961.00Rehab: 7-15kUnsure of what the holding costs will be until its rented but I'm estimating 4 months.Utilities: 650Taxes: 300Insurance: 500Interest: 2400So I'll be in it for about 70% ARV.Projected rent: 12000Costs: prop mgt: 1080Maint: 600Capex: 360Utilities: 0 (tenant pays)Vacancy: 1200Tax: 800 (this will go up in october but maybe only 300)Insurance:  still getting numbers but no more than 1200NOI: 6760Debt service will be accounted for after rehab and when I find a good refi option, but I figure I'll pay about 5.5pct and have lending costs (unsure of what those will be) associated with it.  

We have always dealt with realtors, appraiser, insurance, title companies and big banks.

Having a single Illinois IRA LLC and just getting quality landlord insurance would also likely be a fine option and would be simpler to manage. 

The first thing is to insure the property is 'livable'. 

That will allow you to proceed with the foreclosure.

Also regardless of who the closing agent is, should I definitely buy title insurance?