I am thinking long term in planning what is best for my specific situation. 

You don't have an apartment with long term renters where you have time. 

Hello Ilya,Where are you looking at purchasing your 1st property.When converting a property from a single family to a multi family, you will need to check on the zoning requirements, depending on your location, not every location has zoning.As far as lending goes, it is far easier to finance a single family up to a quadplex, than financing 5 plus units, the DSCR Market for 5+ units is extremely low right now, and there are few if any lenders in that space.For financing 1-4 units, there are Millions of dollars chasing those loans, so you can easily obtain long term financing, at rates between 5-7%.Please reach out if you have a property identified, and I can help you with financing options.

In terms of the condition maybe the landlord didn't add AC or went with LVP and carpet over hardwoods in an A location.

If you are willing and able to qualify for conventional lending you will likely get better terms that comparable non-qm products.  

I dont know how they would be if I filed a claim but in terms of adding/deleting properties you just use their online system its really east and price is right.

I want to get a “checklist” of what I need to do next in terms of the legal side and paperwork to get this thing rented out (or even steps I need to take prior to renting it out, such as getting insurance and a contract agreement).

You have both proven that you're likely to have some success - even if it is try, fail, and adjust. 5 years from now it likely won't matter which option you chose.I'd hate to walk away from the business and get nothing. 

It would probably be worth a phone call to the Garland Planning and Zoning department to ascertain which areas are permitted to have short term rentals. 

They want you to make a decision within a short time, put $5000 down, and even after this, they don’t allow you to go into the house until after closing, no matter how long it takes.