In most cases the bank will want 20% down so your mortgage will be around $280k and over 20 years thats around $1800 a month off the top of my head. plus account for a 6% vacancy rate and $2400 a year in repairs and calculate how much the HOA fees are and insurance and the real estate taxes.

You will need insurance in the name of the partnership (LLC) and it sounds like this is a new partnership so anybody that owns more than 20% will have to personally guarantee any bank loan.

My question is, why is the insurance so darn expensive?

my guess would be water,sewer,taxes,insurance, maintenance, capital expenditures, common areas (everything but the principal +interest ) 

The tenant (or tenants) and their guarantors are responsible for ensuring it's mold free as it was when they moved in.Is there Tenant insurance?

Sure, insurance may help, but the population changes immensely.

I am slowly paying down one that requires flood insurance in case the insurance gets ridiculous, but other than that, I'm happy locking in what I have now.        

I looked as stocks, realestate, gold, insurance, etc...

The issue that has popped up is that when speaking to an insurance agent, he mentioned that we would need separate insurance policies for each of the units (which is not a big deal) but then an additional policy for the Condo Association.Has anyone had experience with buying Condo Association insurance?

Principle reduction is not in your pocket.So when you figure cash flow it should be income minus expenses (vacancy, insurance taxes, maintenance, management) minus debt payments (both principle and interest).And for your ROE after refinance, you are saying that your remaining equity is $66K after refinancing, right?