If rear  of house only replacing the 2 might  be sufficient. 

As has been said many times here, usually a sufficiently high umbrella (liability) insurance policy (obviously in combination with underlying liability insurances for the properties) is usually much more useful if push comes to shove.Then again, there are many situations where an LLC makes sense or is even required (e.g. commercial lending).In any case, you need to contact a knowledgeable attorney who will be the only person able to give you proper advice for your individual situation (and especially state).

It's a place where someone else can be 'self sufficient' in a separate area of your home. 

I would suggest having 1 HELOC for operating during the purchase and rehab phases, but always do a full refinance when pulling the money back out to pay off that one HELOC.Granted this may not always be possible for the new investor being you have to have at least one property with sufficient equity to get the first HELOC up and running.  

My decision process is in this order:1: I ensure cash flow is sufficient to cover operating expenses, vacancy budget, cap ex budget, and has a higher cap rate than the mortgage.

There is entry RV ratio which is the gross rents the seller has on day 1 or today divided by the price you see in front of you (4000 per month / 600,000 price = .66% RV ratio per month).There is CARV or cost adjusted rent value ratio, This is just the proforma rents divided by the cost to buy plus cost to fix up (IE 5500 / 750,000 = .733%) which can show you a couple of things that you can take to the bank, 1) that there is room for improvement and that the incremental amount of capital used to improve the property might have “merit,” also that the cash flow can potentially be improved.The other thing it can tell you is how much the property can produce today and into the near future so you can plan out your property operations to make sure you’re not negative cash flow or if you’re negative that you’re not negative for too long (reasonable future prospects).As for FHA, you’ll have to make sure your property qualifies for FHA SS or self sufficiency rule if you decide to house hack 3-4 unit properties.

She stayed for a week and thought $25 would be sufficient to pay a cleaning person for seven days of cleaning?

Your basic insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

To get on the right path on your first deal and maximize your limited capital for generating sufficient cash flow, focus on setting clear goals, researching the local market, and analyzing potential properties which most local agents can help you. 

If you wish to cashflow the best chance would be the triplex and fourplex route, however keep in mind those have to pass the self-sufficiency test, where if fully leased out the property can technically pay for itself.