We are in the Dallas-Fort Worth area however are open to anywhere in the state and any types of properties.

Zoned to "sought after" Katy ISD and Seven Lakes High school (one of the top in the state & country, so I am told) in Cinco Ranch. 

The lease was recorded with the county but has no terms in it stating that lease transfers with a property sale.  

@Aaron S.Your friend is correct unless there was a warranty - and most warranties are for a year with exception of structural warranties that may be outlined by state law / building code.Sorry you have to endure this.

It's in a B-class neighborhood that's about 20 min outside of the city center (in more of a suburban neighborhood).All of the units are 1/1s though.

Absolutely nothing wrong with it, it's superior to City sewer in many ways.The seller will have get it pumped and certified during escrow, so you'll know the condition.Buy it! 

@Jon B.What state is this?

Why does a city of 200,000 souls have a paltry 1132 hotel rooms?

I would not form an LLC in the states that you mentioned, but in the state that you live in.

I'd also recommend checking out Investor Lab – their events are worthwhile, though there is a fee.Besides REIAs, look into:Meetup.com: Many local real estate groups host events here.Landlord Associations: They provide excellent resources for both Portland and state-level, which could be helpful if you decide to self-manage your home in Salem.Best of luck on your real estate journey, and feel free to reach out if you need any advice!