I’ve had bathrooms where the fan was on a separate switch and the tenants didn’t like the noise.  

For future reference, you can probably estimate 2-3% of the purchase price for closing cost (separate from your down payment) on the buyer side.

First, I would get the roommate to sign a separate lease and qualify them just like any other tenant.

It's bad enough if they're renting a separate property from you. 

We are under the impression that the FHA 203k Rehab loan is incorporated in the mortgage payment for the loan and not a separate loan that is to be paid with a different lender or different account.

I'm debating whether it is worthwhile creating a separate legal structure. 

If they can't pay rent for a month or two, that's a separate issue.

Should I maybe try to rent out to each student separately instead of continuing to look for a group of 10?

Permit cost and trash removal should have been their own separate line item pricing unless the permits or trash removal are for items that were unknown at the start of the project.Are you using a Certified 203k Contractor listed at 203kContractors.com? 

I currently only have one SFR rented out as 4 separate units (room by room).