We're looking at structural damage on that side of the house which will cost yours of $6,000.

Find the hottest cash sales zip codes, talk to a bunch of home owners there, follow up, negotiate, and only contract homes that you have structured killer deals with. 

Again, I'm sorry that I don't understand the intricacies of how this all works, and I guess what I'm in search of is a bit of clarity and direction of how would you folks structure these assets and how would you go about insuring the assets?  

Have them all get on the phone with a CPA and Attorney and create a Asset Protection plan and structure.

I may potentially may want take on some debt further down the road once I've built up a decent portfolio (ie. in 5+ years).What is the best structure to set up at this point?

They will be able to help your friend choose the best type of structure to suit the investor's needs. 

@Jesus Ramirez Income from wholesaling is treated as active income, subject to self-employment tax in addition to regular income tax (at ordinary rates).An LLC is one option but your entity structure should be decided after a full analysis of your situation by your CPA and attorney.

Did the HVAC guy physically show you a leak with leak detector?

Get the deals going first, build some equity and cash flow, set them up with proper insurance and umbrella insurance coverage, establish proper maintenance and property management, then look into structures, entities and strategies for asset protection.Here, a diagram to help you on this path:

You can file taxes with your SS#However most businesses set up a more formal business structure.