Last last 12 years I had all sales waived an inspection or will not consider an inspection rpt to change the sold price.

If you want a different number than what they came up with, you may be forced to consider an Actual Cash Value policy. 

I tell them what I consider an emergency, no lights, water, gas or leaky toilets and pipes.

That doesn't mean that there's no way that this could be a good deal, but I would advise to only buy if you can get the property at a price that you personally consider an "exceptional deal..." for you...Being in a rural setting or a "small town" also means that vacancies will be harder to fill, and reliable property management might be hard to find.  

There is no way I would consider an all cash offer with that margin. 

Since short sales are never guaranteed to go through, you may want to consider an attorney or firm who only charges if the deal actually closes.

At what point should one begin to consider an LLC or other alternative to limit their tax liability.  

personal i would consider an LLC  due to the amount of debt, liability and potential loss that insurance may not cover depending on circumstance, but feelings are mix among the community, talking to a lawyer with REI-exp would be advised along with a tax professional before setting it up is a good idea because if you structure it wrong it will make a headache at tax time, definitely dig into the forums here on BP an simply search for LLC or should i LLC and dig around there is limitless advice available on here ,  hope i was a little help in your decision or steer you toward your answer.

I would potentially consider an 80% ltv but would ideally be higher.

Each school is different as far as what they'll recognize as an internship, but because the position is remote, I could market only to the areas that would count it (plenty of schools are pretty lax on what they consider an internship).The primary concern would be keeping the role 1099 as opposed to W2 to assist in limiting costs and paperwork.