Stay clear of the sheriff's auction unless you are an experienced investorIn this case, the sheriff's auction was packed as I have never seen it and the bidding on my interest went way over my predetermined limit. 

I'm sorry I am a total newbie here, researching still before I take the plunge. you mentioned "The IRS is saying that FMR is $1,328 but that would mean a near 50% increase in rent".

Just run the calculations on the total cost of adding another bed/bath vs the increase in rent.

The $707 is my total monthly escrowed payment.

Hit my goal of 20 properties in December, and grabbed 1 more in January for a total of 21!

I originally planned on staging the house, but my agent suggested it would make it an easy target for thieves breaking into a vacant house (unfortunately it is that type of area).He did bring up the idea of virtual staging, a service where you send in your photos and they populate them with furnishing and decor that look totally realistic (I looked at a few samples).

I spent a total of 2 minutes looking this over but the couple glaring things that stick out to me are the financing terms and the gross rents.Looking at the analysis you aren't planning to owner occupy, to finance with conventional financing you will need a down payment of 20-25% which would be $60,000 - $70,000 down. 

I suspect you have negotiated their bottom price plus closing cost instead of a total price minus closing cost if that makes sense.

I will be paying around $400 month total for living costs (minus food & care), and $350 a month for daycare (YIKES).

That would be a totally different kind of repairs then if your Flipping it.As for the split of gains I guess 50/50 is fine if you both agree to it.