Additionally, have a clear budget, factoring in potential repair costs, and ensure you understand the rules about earnest money deposits and closing deadlines.LLC for Real Estate Investing: Forming an LLC for rental properties can offer liability protection and may provide tax advantages, though the tax benefits are non-existence for rentals.

2.What are the best and most cost-effective solutions for managing this potential long-term issue?

Mark, For all your complaints about people not contributing good advice here... you know the people you're invested with are still raising money and the fact that they've paused distributions, for any reason, is highly important information to any potential investor. 

On the positive side, it seems like you have a good potential BRRRR that you can use to purchase additional properties.

I have seen some properties on MLS that I contact my realtor and they may know right away the reason it isn't selling from showing it previously, or they can review the realtor comments that aren't viewable by the public on MLS.Other potential reasons I have seen properties listed on MLS for a long time. 1) Some investors may not be comfortable inheriting existing tenants.2) It may be it is a class C neighborhood. 3) Structural issues.

Umbrella insurance can be a smart way to shield yourself and your partners from potential risks that basic policies might not cover.From what I’ve heard, local insurance agents familiar with investment properties in your area are a great starting point.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

I recommend reaching out to the builders directly to negotiate any potential arrangements.

I've noticed some really extreme discrepancies between renting and potential mortgage payments which make me hesitant to buy a primary residence.My wife wants to move around 56 (not too far from the ocean), which I don't mind because it seems they have great school districts and we have young kids. 

$500k would be enough to go out and buy something else leveraged that would potentially get you a better return.