Keep healthy reserves for surprises - they're inevitable in this business.Lastly, treat this like the business it is.

I’ve read enough to know that acquiring the LLC is a bad idea due to: unknown liabilities; tax liens and debts; loss of depreciation that has already been taken, and probably other reasons too.

As mentioned, I don't see vacancy and bad debt (missed payments) on here which calls into question everything else. 

Read some good reviews and some bad of these “packaged” wills/trusts, and felt most comfortable with Will Maker.  

I have no way of knowing if losses are due to bad luck, fraud, negligence, naivete, or acts of god.

It's bad enough not to meter a duplex - anything bigger is absolutely absurd.

These costs would need to be amortized over the life of the loan or treated as capitalized expenses.

Then you can treat the mold it will not return.This is a great resource to keep for yourself and tenants: https://www.epa.gov/mold/brief-guide-mold-moisture-and-your-...I suspect your tenant is doing something that creates excess humidity in the home.

This designation allows them to treat rental real estate losses as non-passive, meaning they can deduct losses against other active income.

And since the loans were not in their names and as you note Sellers did not know to ask for PG ( although in these cases PG is worthless) These folks walked and left the sellers in a very bad way..