New to area (large military population here, so this is common)2.

This unfortunately is very common for inexperienced landlords to encounter.

They typically have quite a bit of info online, but a phone call and a discussion with both departments is a good place to start.

I know people do this, and it used to be very common. 

If both buildings are on the same deed, they can be insured on the same policy.It is common for most standard carriers to not insure more than 4 rental properties or more than 8 units total. 

I am a product of parents that dealt with substance abuse so I know first hand the need and have a passion to help people in this area.What are some of the challenges that you have dealt with, what are some of the most common mistakes?

Take your downpayments & start purchasing in areas where Section 8 or assistance is common place.

We didn't have a limit on rentals, we did require that we have tenant names and phone numbers.

A couple of days ago I received a phone call from a gentleman who seems to be a motivated seller.

I'm not sure what market you're in but you might want to do some research and find out if the 1% rule is common for rentals there.