Worst case scenario you can still either give the house back, sell it, try to refinance it, or find hard money as a stopgap.Insurance:   Since the insurance has the original owners name on file, wouldn't any check that results from a claim be sent to them instead of you? 

Maybe.Finally the 6 grand left covers the property tax and insurance with the first month rent or deposit and any other costs without a real estate agent taking more money as ill be the main guy making sure the proper paperwork gets done along with title insurance and the like, then we move in.

total $1000 monthlyRemember most of the cashflow cities are just coming back to 2006 levels.. 130k down can get you a duplex, triplex or quad in riverside and san bernadino county. cash flow probably $400 to $500 a monthabout your other questions,,Need to set up LLC in state of property--- you dont need that. just a landlord insurance and a umbrella insurance to cover you.Need to set up business bank account--- rental income can be deposited in any accountNeed to find Mentor-- yes Need Attorney-- what for?

Went through the LLC battle in my head several hundred times, and ultimately landed on an umbrella insurance policy as the band aid to hold over my liability anxiety.  

Most insurance companies will not insure until the work is done. 

Thought this might also benefit you.1st pillar is avoiding unnecessary and risky activities (don't drink and drive, insurance generally won’t cover your poor decisions) and take good care of your investments - these simple steps will help you prevent lawsuits before they even occur.2nd pillar is a good insurance policy as that cover the majority of your exposure.

My father paid his property off and just pays taxes and insurance. 

I have them insuring my home and want to know if there is something I should be watching out for.

I'm looking to stay in this house a while and I'm just wondering is it worth paying 15k to 25k down on a loan if the PMI will be like 80 to 100 a month? Sorry if the question is in the wrong place.

Also how does this effect our landlord insurance?