At closing we didn't close after the discovery and the opinion of the inspector. 2 days later they sent a termite inspectors to get under the home and photograph the floor joists etc. the inspector again said it was faulty and would potentially cause issues in the future.

I feel comfortable to do it now because like you said, even if things were to go sideways, I know I can pay for it out of the rents from my other properties.I do not want to be stressed out which is what leverage causes....a bunch of stress (at least for me.)

If you have concerns about the heard mentality and its impacts on the economy I'd look at the valuations of the FANG stocks and potential localized impact they could have a RE market.5.

I know that banks want to see reported taxable income and I don’t want to cause any red flags or have IRS get involved.

I say do it without them included cause it might not meet appraisal, then u can purchase it after the fact and get the benefits of the new Trump tax stuff ... 

To address this many states pass laws concerning the sale of a controlling interest in an entity... so while you may think you've avoided paying transfer taxes that is not always true.People also do this to prevent a property from being re-assessed in jurisdictions where a sale would typically trigger that.

Are there any items in the property that would cause you to walk away?

I have no concerns about her integrity and ability to pay, I am concerned though about the financials and wonder if I should move forward.  

Is there anything else I should be concerned about or looking into? 

My main concern with it is that area is seeing a massive amount of new construction in both hotels and houses and if the economy gets soft the booking could get very competitive and rental rates could compress and occupancy fall.