Ahmad:It normally starts with the physical inspection of the building(s).  

I would like to know if this is normal in a process, I thought this was all paid at closing.

Part 1 of 5: What is a Deductible Buy-Down ProgramDeductible Buy-Down programs are insurance policies a business/real estate investor can implement in their protection plan to lower the amount of deductible they have to pay when there is a claim made.These are policies which are in addition to the normal coverage plan (property, liability, auto, umbrella, cyber, etc.)Part 2 of 5: How Buy-Down Programs WorkThey are one of many ways a person/business can implement alternative insurance protection.Buy-Downs are added to protection plans to lower out of pocket expenses for the insured at the time of loss (a claim)Example of how a Buy-Down program works:You have a commercial property portfolio.Its insurance policy has a deductible and a premium.

Would a normal person have seen the dishwasher leaking onto the floor each time the appliance was ran as an issue? 

-Hardwood floors have some noticeable finish wear signs in high traffic areas but that could be normal wear.

You shouldn't use the tenant to paint, even if he matched your normal painter's bid.

Is this something a lot of people run into, is this something that is normal?

The purpose of the FHA loan is to increase home ownership for those who would not normally qualify for a conventional loan.

When we compare costs to cover and what we have actually received in claims (we rarely claim, normally pay out of pocket to keep premiums lower), it seems we may be in better shape to self-insure. 

You can do a 10% down on a second home property (pied de terres or vacation homes), that can be an income property also.