Tenants are extremely hard on appliances, it is not uncommon.Landlord Responsibilities: Landlord will at all times during the tenancy keep the premises fit for human habitation, and shall in particular:a.Cultivate, care for and mow surrounding grass, lawn, flowers, and shrubberyb.Maintain the premises to substantially comply with any applicable code, statue, ordinance, or regulation governing the premisec.Maintain the roof, floors, walls, foundations, and all other structural components in reasonable good repair as to be usable and capable of resisting normal loadsd.Keep any shared or common areas reasonable clean, sanitary, and safe from defects increasing the hazards of fire or accidente.Provide a reasonable program for the control of infestation by insects, rodents, and other pests at move in f.Except where the condition is attributable to normal wear and tear, make repairs and arrangements necessary to put and keep the premises in as good condition as at move ing.Provide reasonably adequate locks and provide keys to the tenanth.Maintain all electrical, plumbing (main lines), heating, and other facilities and appliances supplied by Landlord in reasonably good working orderi.Maintain the unit in reasonably weather tight conditionj.Provide facilities adequate to supply heat and water and hot water as reasonably required by the tenant

Insurance is really about covering the structure that is there even if that structure has unpermitted additions.

For a core and shell building guess you are looking at $150 per sf and up depending construction type. 

Our lawyer is concerned the developer may turn out to be a shell corporation that they will close once the house is sold so we have no recourse against them if anything goes wrong.Is it common to require this clause in the contract?

No mortgage payments due - If the tenant stops paying rent, or if the property sits vacant for a month or two (it likely will happen), then you're not still shelling out those mortgage payments every month.

He said there's no structural repairs needed, no wood rot, no bugs or mold.

Your situation sounds like a candidate for LLC protection, but I'm no lawyer.There are some good books on entity structures as well, and I think there's a webinar or pod cast on the topic here at BiggerPockets.

How do I setup a loan with possible investor and what type of lawyer to see to do the paperwork for a flip I may do.

Upon viewing the property, although structurally sound, is filled top to bottom, room by room with "stuff" that the Seller promises is being moved out.

It is the only entity structure whose rules allow the business owner to take a “reasonable salary” (subject to social security and medicare) and then take the remaining profit (often as much as 50% of the remaining income) out as distributions not subject to self-employment taxes.