My condos in Edmonton (the ones I bought earliest, 2 years ago) have gone up about 20-30%, but I just bought them 2 years ago to 4 months ago. 

She will either take you seriously and move out, or she will show up in court with no defensible position and be forced out.The lease says she is responsible for electricity, but the former owner and property manager sets a precedent by paying it.

Should I set-up and LLC before I begin developing and break ground?

I like the idea of single family homes as rentals for a variety of reasons.

However, if you put 20% down tho, and is still loosing money there is no reason for you to buy it. 

Have a whole new lease drawn up and hope they will sign.My advise is do nothing and have a new lease ready to sign at lease renewal.

I furnished them from estate sales and local furniture shops, and the furniture/sheets/towels become damaged over time and need some care.I have a PM manage the remote houses, and they cash flow just fine, the PM handles issues that come up, and they paid off the debt on them once.  

Do they set up the systems to market on your behalf?

Before you move ahead is there a particular reason why having this commercial space is important to the project or are you building this design because that's what the zoning requires?

Feel free to DM me to set up a consultation!