They have the lender's policy for their protections, so the owner's policy is spearate.It definnitely raises red flags, and I would ask more questions if I were you. 

I don't know anyone in your area that does this, and I just tried to give you details, but BP flagged my response as self-promotion. 

Red flags were up for me from the get go as “to good to be true” sits in the back of my mind quite often.

Would certainly need to know how she managed a chapter 7, and is also flushed with cash, that may or may not be a red flag.

Any Landlord who considers it is like ignoring a red flag flashing right in front of them.  

I also wonder, since the article mentioned it, if the insurance claim will be challenged by the insurance carrier due to negligent oversight of the office.

A classic red flag is someone stating they intend to move into inferior housing without any non-financial motive that can be identified. - You need to be able to convince the underwriter of your true intent to occupy, and using the term "house hack" (or any financial incentive) in this letter to the underwriter is a non-starter.- Not only do you need to convince the underwriter, but you need to convince them that a gov't employee at HUD will be convinced as well.

I saw a property that had a pre-paid 30 year lease to one of the biggest cell phone carriers get sold at tax sale. 

But if you say go to Auction.com and bid on line with them. its a normal escrow.. and if they are selling and not providing title insurance or allowing you to purchase your own.. then just don't bid on that particular asset .. unless you know whats going on with it.. that's usually a red flag anyway.but by and large we have had no problem with those deals.

I work with GC's on a daily basis in my capacity as a hard money lender and there are several red flags that you should look out for.