We are just speculating on the upward moving of this market because the house price keeps rising and there are organic factors that support it so in a moment we think negative cash flow can gradually be covered by picked up rising rental rate, but i guess its not financially sound on this deal

I had insurance on the property, so im covered in that aspect, because they are rebuilding my unit as part of a mass rebuild project jointly with the HOA insurance.

I feel like someone should do a video and walk through of a real life MLO contract, covering each section in detail

Creatively, you might find someone to partner with to cover rehab costs, if the property rehabbed will bring in more than you owe, the difference becomes the partner's profit.

This avoids the issues you get when taking on tenants that were not properly screened by the old landlord.Your only option now is to walk away or push current owner to evict or move to cash for keys. it may be to late to request the unit be delivered vacant, but if not that's what I would suggest doing. if you follow through with the purchase, keep this tenant on the shortest leash possible and start saving up for the (very likely) eviction cost.

Oral month to month contracts are perfectly valid, and transfer along with the property. in fact, this is nearly an ideal situation since month to month contracts give you more control of the property, especially with inherited tenants who we assume were not properly screened when placed.

The general idea is the bank will loan you extra money to cover the cost of repairs,  this is typically only done with commercial loans and they usually escrow the money and release it to you as you complete the repairsBy way of example say you buy a 500K house that need 100K in repairs. 

I had a rental appraisal done for it for additional cost during the process and the results were good enough so that 70% of that number covered my Principal, interest and insurance and property tax payments with a little left over. 

If they are able to cover the mortgage then they should be able to work the deal out with you.

If you don't many claims will not be covered during the renovation period.