I might roll with option 1 but have in the lease if the city issues another fine option 2 is in play.  

Windows--repair, replacement, etc--are on me. lol.I'm going to nag about replacing those dead trees in fall and I'm also going to see when we have it in the budget to refurbish the basketball court a little bit, and talk to the investors and see if they want to light it since right now, tenants have commandeered a light meant for illuminating the entry sign to shine onto the basketball court, and it's well located such that people playing after dark won't disturb people in the units.....

You play therapist and marketer more than anything.

I would reiterate the point Nathan made in regard to developing a plan to have capital in the deal, no money down or tying up all of your money up in equity is typically not a good play.

Understand that it may be difficult for the tenants to find replacement housing, and especially with government subsidies playing a role, you may allow them a longer-than-average time to find new housing. 

@Steve Adler a lot of variables at play here man, and to be honest I'm probably not the most suitable person to be giving such major life advice, but a couple things do come to mind.

These properties sold during winter which I think played a role... as mentioned before sub 350k is tough to get now so knowing what areas should be priced at and trying to scoop properties below that is a very obvious, but tried and true method to build equity, particularly if you're okay with buying properties that need a facelift.Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Even at 2% over 30 years that’s only 82k financed.This isn’t looking like much of a deal as a long term rental unless you are doing a pure appreciation play.

Having an LLC is not necessary.However, it should be decided once you have a conversation with an Attorney and an Insurance agent.Some factors that come into play are1) Your Net worth2) Your Risk Tolerance3) Your Risk Exposure

Adequate insurance is generally recommended as a first line of defense and may play a part in this decision as well.