Would the new owners be responsible for this if they have to tear down ceilings, etc.?

Plumbing is definitely exposed at the ceiling.

Someone above mentioned flat paint-only use that on ceilings, use a eggshell or similar finish on the walls.

My advice, if you're OK with the loans in your own name, do Conventional/FHA for the first deal or two until you hit your head against the DTI ceiling, then switch to DSCR or a similar style loan to scale upward.

I actually have ceiling fans in all the bedrooms and the den, as well as small oscillating fans that can be moved from room to room. 

White trim and ceilings 

Instead of Section 179, you may be better off with 100% Bonus depreciation that does not have a ceiling.

He is a contractor and very skilled at it, so we began the process of getting it to FHA standard (covering exposed wires, fixing some siding that had fallen, sheet-rocked a ceiling with old water damage, cutting grass so inspector can see septic, etc... we're about $1,500 into it). 

Here are the things I DYI'd vs. the things I hired out back when I was starting:DYI: painting, laying flooring, basic carpentry, basic plumbing, drywall repair, basic house maintenance, yard work, property management, VERY basic electrical (like wiring in ceiling lamps to existing receptacles), basic tile work.

The deferred maintenance was significant- 3/4 of the roof needed replaced, the hallways were incredibly dirty, 3 vacant units that needed complete rehab, residents had anything from holes in their ceiling to faucets shut off because they were leaking so badly, landscaping overgrown and/or dead, and the entire building smelled like cigarettes and urine.