The best part is that everyone here is excited to help you learn and grow into real estate investing.

I will tell you though that in general the interpretation of the inspection report, for the most part is up to you. 

Hi Duncan, Yes you can negotiate during the due diligence stage and you can try to negotiate at any point in the sale process until close.If you end up not being able to move forward during your due diligence, your earnest money deposit should actually be fully refunded to you, provided you put in the contract that your offer is contingent on your ability to do your due diligence.There were several deals I worked on where additional repairs were found during our due diligence that necessitated negotiation.What we did was thoroughly explain to the seller the impact of the additional expense and then offer them the options of moving forward at a lower purchase price, or working out terms at the same price (owner financing/sub2/something else), or cancelling the agreement.Usually, the seller would choose to move forward at a lower purchase price but we definitely had parties choose to cancel or finance too.If they chose to move forward at a lower purchase price, we'd write up a simple 1-sentence addendum to the original contract stating the new purchase price and have both parties sign.You may want to include a deadline in writing of when the seller must respond by before you move forward with cancellation so you don't lose your EMD.

In order for a landlord-tenant relationship to work smoothly, there needs to be open communication between both parties.

This is why it is recommended that you outsource property management to an impartial third party. 

Anything call that has a decision or a follow up event for either party I would text it as a follow up and ask them to confirm. 

Once this has been signed by both parties you have a nice and tidy lease.The trouble with moving it to your lease is that the odds of all the terms being the same throughout the lease are scant and it would be difficult to move them to a new lease with different terms without it being a substantive change . . . which if the tenant doesn't mind then it's probably not an issue.  

The only part I am not sure about if the market will "correct"; I believe it is much more likely that it will level off.The reason I believe that is affordability - the NAR publishes an affordability index; basically how much of a median household incoem is needed to buy a median home with 10% down.

All parties sign in their cars respectively and attorney will stand outside in a parking lot and review docs when done.

However, in case of litigation, that information would be made available to the necessary parties (at least that's my understanding).