Not sure if this is his area of expertise but I know he's a real estate lawyer.

The bank is served so they know the tax foreclosure is happening and they have the opportunity to redeem and pay the taxes to protect their position.

Pulling credit on a Mortgagor is just as protected as pulling credit on a tenant or applicant.

Protect yourself from surprises.Good Luck!

If the latter, how are my dads investment, my equity, and the occupant / purchasers interests protected in the paperwork?

I'm inclined to LLC as I was told LLC offers better protection and may have better tax treatment.2.

If you plan to assign a contract, it's better to have a solid form that includes mandatory and desired disclosures, etc. that give the assignee reasonable options and protections.  

Realtors work only on commission so it's only fair to expect them to protect their time like this.

Surface-mounted wiring is to code in most areas if inside adequate protective molding.  

Now, someone told me that I could create an Operating Agreement detailing the arrangement with the contractor, the idea being to give the contractor confidence that everything is on the up and up, and he is adequately protected.