I submitted an insurance claim and it was fully covered by the insurance. 

The title company will not issue you title insurance until the transaction complies with the law as they will be on the hook to make title right if they improperly close on your sale.In your situation depending on Texas probate law, the Widow may have to petition the local probate court to be appointed as her husband's legal representative to complete your transaction.

They will be responsible for all the repairs, taxes & homeowners insurance.

I am shopping insurance for the two 4-plex units that are basically together as one 8 unit complex.  

Once you turn in plans they will make you fix everything to code so you have to have a contingency budget for that alone as you won't know about these costs until after you close.Also, I haven't seen anyone complete a gut rehab in less than 10 months (in Chicago) so you have to consider your holding costs for a year (taxes, insurance, security, lawn maintenance/snow removal, water, gas, electric, cost of money).

:As long as you get title insurance, I would never sweat the difference yes seller will pay for title insurance.

Homeowners Insurance- I'm already getting quotes from insurance companies, so why would I pay for insurance through my lender without even seeing what the policy is?

I have a property I hope someone can help me think through. 4Plex 255K Purchase Price2,850 Gross Income2,110 Payment including taxes and Insurance..I want to live in one and rent the other 2.

These include (but not limited to) loan payments, taxes, insurance, utilities, etc...  

As far as tenants; I don’t know California’s laws but basically you advertise, screen, get a landlord type of insurance policy, sign lease, set expectations, take care of tenants and home but don’t confuse that with being soft on due dates etc.