Would this type of fine flag you or your company when it comes to taking out insurance?   

Dude.. if tenants are smoking drugs outside... that is a red flag..D class properties always have high return but high risk as well.

I think it has helped me see red flags in partnerships and it helped me learn what not to do.  

. ;-)I noticed the same thing that Michael B noticed when I read that particular post of Jonathan's - It jumped off the page at me like a big red flag; I could hear my 'BS detector' alarms going off (okay, maybe that was just in my head...).

If you drop the price 20k to what the house will sell for then you will make no money.I see red flags on the rental numbers as well $2300 for a 220k house?  

It would be a very small factor in me deciding to walk away and would need a lot of other red flags for it to not be worth it.

I know this is a big red flag for lenders.

Why would you even think about permitting someone to run a business out of  your rental property  Your not commerical propertyDon't even call your insurance company don't raise a flag asking that type of question !!

@Douglas Higa There are several carriers looking to to write risks as you describe.

Appraisal came back as a 5 on the risk scale and was red flagged.