If it is an outside liability claim (like someone suing you because your son killed someone with your car in a crash), if the LLC is set up in a proper jurisdiction with charging order as sole remedy (or your LLC is owned by a holding LLC in such jurisdiction), then the plaintiff would not be able to reach into the LLC asset.You can combine both by having the property owned by a land trust where the beneficial owner is an LLC.Using asset protection structures can be very efficient in protecting your assets from catastrophic lawsuit by limiting the risk to only part of it.

It should specify contingencies, deadlines and remedies for default.If the due diligence deadline stated in the contract has come and gone, then those due diligence items can no longer be used as a means of terminating the contract and protecting the buyer's deposits.What other contingencies are in the contract? 

Of course, if you have really deep pockets/reserves and are willing to have big cost overruns--throw money at the building--then full steam ahead.Keep in mind going forward, the asbestos can be remediated if the price of the property is right. 

What is your remedy in the event of a seller default?

We had briefly considered trying to see if the home could be repaired and have mold remediation to rent it out, but the neighborhood has gone down in quality over the years and we are hesitant to have responsibility over upkeep of the home.

If the breach is not remedied within the five(5) days, the rental agreement shall terminate as provided in thenotice subject to the following: If the breach is remediable byrepairs or the payment of damages or otherwise and the tenantadequately remedies the breach before the date specified in thenotice, the rental agreement shall not terminate.

I would give her the standard grace period (whatever is dictated by lease) and then let her know that she is late and you will pursue whatever remedies you have at your disposal. 

- What steps should I take right now to remedy the situation?

Remediation is largely to protect you from liability. 

A good local Realtor can help you with that.The advise that @Bjorn Ahlblad gave you above is categorically wrong and depending on state law, can land you in a world of hurt.For example, I can tell you with 100% certainty that in Massachusetts (I'm also licensed there), if there is a child 6 or younger living in the home, the owner MUST test for and remediate lead paint.