One of my duplexes in Medical Center area, 3 brdm / 2 full bath, each with family with kids and house doesn't have separate meters for units,  so I pay the bill and it averages to about $140/month. 

My wife Michelle Moore has been a mortgage broker for 15 years and I'm in medical device sales.

The seller provided the tax returns but the claimed cash flow has taken a sharp decline the past 3 years to as low as $61 in 2015.  

Medical bills - get them into a payment plan.Why aren't you confident in their ability to pay rent?

After this point you would use the schedule E income that shows the rental income that you claim. 

Down the road, if I feel it necessary, develop an LLC and do a quit claim deed into the LLC's name.

Its that plain and simple.Property crime rates are failing rapidly in Downtown and Midtown Detroit and Insurance companies have claimed for years they went on a zipcode by zipcode basis, and not once in the last 10 years have they adjusted the rates down for these areas....hmmm.

I still live in Dallas County and I am 60 years old now and thanks to my medical problems at 54 I am lucky my wife has been saving money about 25 years   She is very frugal and there are pros and cons about that.  

Once you buy property in your personal name you can easily and very cheap do a quit claim into your LLC. 

What if I don't claim it as my primary residence?