That paypal policy is for friends and family.  

We use outside managers to manage the property.Right now I am using an All State personal policy on the rental property with the LLC as additional insured and, in addition,  a personal umbrella policy to cover anything in excess to what is covered by the personal policy.

If we make a $2500 claim on a vacant property, it might be declined (or at lease raise a bunch of questions) and the premiums would be at risk to go up if we are lucky enough not to have the policies cancelled.

If the LLC is not an option then may I suggest you get a very good insurance policy and possibly an umbrella policy. 

Ideally the income is guaranteed and by an insurance policy not just a LTD management company that could be closed down leaving you in a tricky position.

I asked my buying agent, and he said he would rep me, but it would be 1.75% ("firm policy") vs the typical 3%, which equates to $7k and would almost defeat the purpose of this whole process.

Failure to abide by this policy will result in termination of tenancy.

There are not very many people that have developed pocket neighborhoods in Portland, but if you want to talk to two of the best then I would try reaching out to @Mark Desbrow at Green Light Development who has done two pocket neighborhoods I believe, as well as Eli Spevak from Orange Splot who does amazingly creative work and is also a pioneer of pocket neighborhoods in Portland.Currently there is a proposal in Portland called the Residential Infill Project that seeks to provide a path for more pocket neighborhoods to be developed, but it is a rocky road and some of the latest versions have really dwindled down the policy's potential effectiveness.If you want to check out another great pocket neighborhood while you're in town but want to escape Portland go to White Salmon, WA in the Gorge.

A Homeownes quote will tie to your personal credit and has many beneficial coverages to cover your personal beliongins, etc...But the annual cost can be more than a Rental Dwelling policy.

I was always told that when you own a business (which whether you know it or not you having a rental property is a business) you have to have policies and procedures and structure followed.