@John HyunThere are several considerations that can go into the analysis of whether you need an LLC or whether a large insurance policy will suffice.

I doubt insurance would pay for improperly installed solar panes and/or damage done to your roof from leaky brackets. 

Would need 25% down ($75K), 25 years, 5% interest, $90 insurance, $275 property tax).

Normal Rent: $1,400/monthShort Term Rent: $2,800+/monthOption 1 4.25% Interest Rate:140K One parcel (need to sell it someday all at once)Insurance:94PMI: 20P&I: 585$700/month21K Down.Option 2 4.25% Occupied Side 5.25% Investment Side:140K two parcels (could sell one at a time)Insurance: 94PMI: 30P&I: 309P&I: 327760/month17.5K Down.What option would you go with?

If so, your title insurance policy (if purchased) might cover the back water dues.

Since you are the bank make sure he has insurance on the property and get notifications if he drops his insurance, Might put that in a clause in the promissory note.

Currently, the federal government is subsidizing the cost of flood insurance but the government has made it clear that they plan to phase out the subsidies over time.

I ballparked the Insurance amount, listing agent stated 2k/annually but I wanted to leave more of a cushion.

@Kay March , Prepaids refer to escrow for various expenses which typically include taxes and insurance. 

Vacancy is too low, should be around 8% so you save up one month's rent each year (1/12 = 8.33%), CapX is WAY too low, should be around 10%, repairs should be around 5%, and you also left out budgeting for insurance.