Once you buy property in your personal name you can easily and very cheap do a quit claim into your LLC. 

However, he's given us the distinct impression he won't leave easily.  

The two stories can EASILY be "disconnected" by blocking the staircase and building an exterior staircase to create a private entrance to the second floor. 

You could locate it in your living place as long you can close it off easily and have minimal distractions.  

Pick the wrong time to buy and the wrong time to sell and your return can easily be negative. 

You'll get what you pay for.Remember diminishing returns applies to accounting, your best system will be that that accurately records your financial transactions in a consistent manner which is easily managed and understood by the reader.

So, pay no more than $180K.In two years hopefully the market has appreciated or at least followed inflation and now those $250K houses are worth $275K and you are easily able to sell for $275K since your place is nice and updated.  

The house is walking distance to the university and can easily be rented for 1000$.

I'm going to force myself to walk away from the computer now: I could easily burn up your whole day picking your brain if you let me, but I'll try to be respectful.

It has huge upside and after renovation could easily fetch $175-250 more per door...possibly $1000 more per month!