What is the best way to tackle the insurance situation as the current policy is in the 2 owner's names?

Otherwise you're going to find yourself later being short on budget when you're needing to tackle the big ticket items... like when you realize your furnace is in worse shape then your thought or that the floor joists under your kitchen are rotted. 

I suppose the best way to tackle this is treat it the same as if they were two unrelated co-tenants, even though dad alone qualifies. 

That also could mean that there is profit for someone who wants to tackle the situation.Note that you could try to get an option on the property based on its present condition and then work on a better solution.

and we have officially hired a new developer, starting next week, who will be tackling this project first!

If you're going to make a go of it I recommend tackling it yourself and advertising as heavily as you can until you build your client base.  

I would love to focus on whole selling right now and later down the road tackle flipping and rental properties.

Larger more experienced landlords are harder for these agencies to tackle, so their focus over the past 10 years has increasingly shifted to 1-3 unit homeowner landlords.I like Rob's ideas. 

I have recently begun tackling these excuses because I know success is my only option.

Congrats on the ones that did go well and kudos for having the guts to tackle a 171 year old house.