I would do exactly what @Alecia Loveless isuggested for where to keep the money -- a high yield FDIC insured savings account to make sure that your money is safe and that you get as much of an ROI on it while you're building it up.

And as you get more successful, the more you'll be careful how loud you are and how much more privacy you wish to have.

That would need to be specifically addressed in the assignment though.Now it is common that in most real estate transactions that certain fees/expenses are paid for by the buyer (lending fees, half the escrow fee, appraisals, inspections, survey, and attorney fees for the deed of trust) and certain fees/expenses are paid by the seller (title insurance, half the escrow, prorated taxes, prorated rents, deposits, and attorney fees for the deed).Now it is common that in many wholesale transactions, the contract states that the buyer is elected to pay all closing costs.

I asked my insurance company for referrals for maintenance, monthly cleaning (keeping eyes on the property) --I would continue that.  

Should the owner expect that insurance for a vacation rental property will be more expensive relative to the insurance they had on the property when it wasn't being rented?

My concern is the insurance premium that would prevent a retail buyer from purchasing.

They have to carry liability and workers compensation insurance.

Assume i sell it for fair market price, and with 20 percent down, pay title insurance, appraisal etc. will a bank allow this?

To clarify is your cash flow $850 a month after all expenses (mortgage, taxes, insurance, maintenance, turnover,etc)?

I would go closer to 10% if you will be conducting 2-4 inspections a year, full marketing, handling all maintenance, handling insurance compliance, and all of the other things that come with managing a property.