When I first got into RE, I felt I should've studied finance and law, because it would help me structure deals and work with larger investment firms.

I would probably structure the deal to include a small flat fee every month and then add a surcharge to the contractor invoice when repairs were needed.

I have researched though and it is best to set up the correct business structure before purchasing so you can utilize as much tax benefits as possible.  

It has a small 2nd structure on the property that used to be a 2nd garage that someone finished off and now is living area ( am not sure the exact size but I am looking into it.  

Chris Mason, the primary adviser for a client's decision to put all their assets into an LLC is their attorney, not their CPA, and if my client, based on recommendations from his or her attorney, decides to structure his or her business in a certain way, I'm going to prepare their tax returns consistently with the tax code and in such a way that reflects the legal reality of their situation, not what a lender or any other service provider wants me to do.That being said, I think it would be wise for attorneys to understand the tax as well as lending ramifications of structuring a client's business in a certain way and should definitely connect with their client's CPA and lender before making recommendations.

My strategy for now is to pay a little extra in insurance premiums to cover liability up to 1 million on each structure.

.- Advantage of conventional is the lower MI costs and the ability to structure the loan with no monthly MI like Zak mentioned, however he did not state the break even where conventional is better than FHA.

Before buying I would definitely check out all the permits issued and inspections that would have occurred for the slab, electrical, plumbing and structural/foundation. 

I don't understand the legal structure of the place, why isn't it condos?

Not afraid of doing the work other than structural, electrical and major plumbing.