For the proceeds I have to pay seller I would have to issue him a 1099 right?

I do have additional coverage for the sewer since I knew it may have issues before I bought the property. 

However, anything that impacts functionality like plumbing, HVAC, or safety issues should be handled before listing to avoid turning off potential renters/buyers.If you’re re planning to lease it, tenants will expect everything to be move-in ready before signing.

We are hoping to streamline tenant communications, maintenance requests, and payment records. 

This matters as different auctions are prone to different title issues.

excess funds do not get issued until after redemption period. 

On the other side of the spectrum you have the investors posting in these forums about the contractor who walk off the job and shares how they hired them to do a SFR gut reno with updating mechanicals, new roof etc. for $45k and is wondering why they are running into issues. 

But I have a client with the same type of building and has a non-conforming basement that he uses as an Airbnb and hasn't had any issues with it. 

You also have to check out your current lenders MAX CLTV rules because it may cause issues with the first DSCR lenders original note/agreement.There are some lenders that have CLTV rules or will not allow a 2nd lien if it does not confirm with their Max CLTV similar to a 'Due on sale" clause.

thx  The LLC would issue a K-1 to each partner.