The rent from my tenant nearly covers my whole PITI (Principal, interest, taxes, and insurance) payment.

The people with bigger portfolios here tend to advise building up a cap ex reserve that will cover your big surprises, but eventually to treat it like insurance. 10% each seems like a good first buffer, until you have the reserves.

I’d be surprised if the insurance company didn’t forbid this like the lending institutions do . 

Here's numbers:Purchase: 136k, 5% down = $6800 + closing costs and prepaid insurance will be roughly 10k downARV: 175-180k, have to see how the neighborhood does in the next year, my realtor firmly believes 180.Rehab: 15-20kAfter selling and paying fees we're looking at 10k profit? 

Remove the Mortgage Insurance and get the lowest rate you can as a primary.     

Who does everyone use for insurance on their rental properties?

Hey BP community, I've always heard that whole life insurance is a rip off and my husband and I have good term life policies.

Which insurance option do you use and why?

Vacancy at 7% ($133), Insurance $70, Maintenance / CapX at 7% ($133), Taxes $75. 

@Alexander Nason - it may also be worthwhile looking at a Fannie Mae Homestyle Renovation mortgage: https://www.fanniemae.com/content/fact_sheet/homes...Homestyle loans require a higher down payment for 2-4units and loan limits aren't as high as FHA in some areas, but I think this could be a better option long term if you can figure out the remaining down payment:No upfront mortgage insurance premium (1.75% on FHA)Cancelable mortgage insurance (once you reach 22% equity) We bought our 4-plex with an FHA loan and it has been incredible - 3.25% interest rate and 3.5% down on $700k would be really challenging outside of FHA, but my mortgage insurance is almost $600/mo.