All the tax reporting (and, potentially, legal liability although I'm not an attorney to have a valid opinion) will fall onto the parent LLC then. 

These are more complex legal structures that can provide even more protection than a traditional LLC alone.

Regarding the secondary roof issue, your first step should be to consult with your current insurance provider.

While they have a right to be present, they can sabotage the showing, talking about their issues with other tenants or neighbors, wasting everyone’s time.

What I would do is politely communicate the issue to the applicant.

As it stands now, I am going to renovate the apartments, the tenants will pay me and I will communicate with them directly about all issues with the property etc.

We have "squatters rights" aka adverse possession laws but it's really difficult to meet the legal requirements for that: the squatter must live in the property as if it's their own for 18 years, paying property taxes, making improvements etc. and it must be open and hostile/ against the true owners wishes for the full 18 years continuously to be able to make that claim.

**Legality Varies**: The legality and accepted use of BOVs/BPOs can vary by state, with some states restricting or prohibiting their use[2][4].In summary, broker opinions of value can be a cost-effective and timely way to get a rough estimate of a commercial property's worth, but they have limitations in terms of accuracy and acceptability compared to a professional appraisal.

There is no substitute for good legal assistance when there is a lot of potential liability on the line.

I think if you search student rentals many issues cross state lines.