He is a project manager at Amazon who is super smart (went Wharton and is heading to HVB in the fall).

But yes having both Flood and Hurricane would be smart.  

Also, would it be smart to put 3.5% down on 6 properties or 20% on one?

@Michael Ash in addition to calling the police, you could ask them to back it up with photos or video, everyone has a smart phone these days so that shouldn't be to hard, assuming it is really happening.Could just be they have a large, close family that likes to visit, there is certainly no crime against that.

I personally don't feel it would be smart to rent to someone that doesn't pay their bills but I am fairly new to this and would love some constructive feedback.

This does not mean you are not smart, it just means you have a lot to learn about this topic. 

Have been working in Technology for the past 14 years and love what I do and wish to continue my full time employment.

I still work a W2 (because I like what I do, though I don't have to any more), and that, and being (mostly) smart with my money is what got me started. 

But other than that it's a smart way to get started.

What you did was not only humane, but also a smart business thing.