You won't be able to get the renters' names, but you can look up the unit numbers by putting in the main address into the tax records and it will show all the apartment numbers at that address.

If you live in the property for at least two years, you can sell it without paying ANY capital gains tax (unlike traditional flipping).We've done this a few times, but almost every time, we end up keeping the home as a rental.

Is it advisable to do that for protection and tax deductions?

This method allows you to take some of the profit tax free and indefinitely defer the rest of tax, using it to purchase larger, nicer property/properties in areas with better cash flow potential.

Depending on your tax returns, that might be an option.

I don't believe the tear-down costs would be added to the owner's property tax bill when there is a condemnation.

Without a written record of this arrangement, is there a way to claim any compensation for those renovation costs, or would that be difficult to prove in court?

However, if you can flip it and make a solid profit higher than what you would get out of a cash out refi and/or rents won't cash flow, then flipping makes good sense (unless you need a tax write off but since this is your first investment, that probably isn't the case).  

Whoever taught you that I would go to them and do what they did as this setup for an ownership structure in my opinion is far to complex and your CPA is going to be scratching there head at end of year with all the tax stuff they will have to do and how you have to keep bank accounts for each entity and move money form one to the other to the other....

Hallway utilities are around $25 a month and tax deductible meaning net cost around $17.50.