I am the one signing it and have to make sure I understand every single sentence, before I'm commiting to it.

From this experience, I'm thinking in the future I might include the words in connection to the 10-day inspection period sentence, "will purchase as-is with exception of health hazards discovered during 10-day inspection".  

glad to share costs ect, just connect with me as it's not a 1-2 sentence answer.

I get the basic idea, but I do not fully understand the  last sentence "you could structure the deal whereby the private lender gets a note and mortgage (deed of trust) in first position, while the owner takes back a note in second position."

I have seen one-page contracts that investors seem to use with one sentence Subject To Financing or Inspection.

However, if somehow you do get the opportunity keep in mind that if you are caught committing insurance fraud in Illinois of between 300 and 10k you will get to enjoy a minimum two year sentence in prison. 

Just a quick comment that most banks (conventional lenders) will not lend to an LLC so keep that in mind for your planning.Also, you mention living "practically debt free" while in the same sentence state you want to use the bank's money for investing.  

(if you don't know how to finish that sentence, there's your problem.)

The note has about 5 sentences, that's it.If I read your OP correctly you have 5 pieces of real property as security. 

I do BPO's and if you want me to take a quick look at it I can give you at least a ballpark ARV in about 20 mins.The first two sentences of John's reply should be headed by all wholesalers.