@Daniel Medellin Regarding your question, it would depend on the lender or bank you're working with if you want to go that route in the future. 

We have an insurance policy on the rental house (through State Farm), that includes a personal liability section, which is essentially equal to our current net worth.Given that a tenant could sue for more than this if an accident occurred, we are thinking about adding either LLC or an umbrella policy (or both) as extra protection.Any advice on which way to go, and if LLC, any recommendations for a law firm or company the Indianapolis area?

Your path will likely get you to where you desire, it will just take a little time. 

If the spread between the purchase price and ARV after a value-add is high then you are good to go.

It seems like most people are suggesting the brand based account is the way to go, pending the legal clarification of whether it is actually possible to keep a listing active through a sale via a property management account. 

@Mike Terry sounds like a pretty good argument to go after the property, I think your question is more along how to value it, and account for the deferred maintenance. 

You're going to have to go learn about that yourself.The faster you get rid of this bozo the better off the whole system will be.

However (to go into detail requires a separate post), that's not quite the correct course either.

I would not want to go for the single-family and then run into a vacancy, as I foresee that could happen as one of the cons.

If you decide to go the multifamily route, Real Estate lab .com is a multifamily software for deal analysis plus they have many other useful features.