If you want to borrow money from your family, figure out the arrangements ahead of time and get it all in writing. 

Thank you ahead of time!

I'm trying to figure out if it's related to improper repair on the first 2 visits, or if it was just time to replace it.

As far as how to form an LLC and the rest of the questions you've asked here I would highly recommend getting some face time with a local real estate investor who has walked this path ahead of you and can speak from their experience, as this will be a good opportunity to "begin with the end in mind."

I've decided that I will go ahead with this deal even with the huge run up last year. 

It sounds like you are ahead of a ton of people just because of your knowledge about inflation and rates.

Just make sure you now the penalties ahead of time if there are any.

Bought my home Dec31 2020 in Van Nuys, CA (Los Angeles) for $586k. (5% down, 2.99%)Seeing very similar homes in my neighborhood (with even worse specs/curb appeal) going for high $800+ as of 2021.Not ready to move on yet, but just trying to plan ahead, as I'm considering relocating outside of LA in the next few years, and will need to capture some of that appreciation gain to make a healthy downpayment on the next home.

Between the original closing costs, foundation repair, pipe repairs and water damage as well as the taxes and commission to sell it you still could come out even (or ahead), however, if you've fixed most of the issues at this point you might consider waiting to gain more appreciation on the property before selling.Reading your second to the last sentence it's written in a way where you may have already made up your mind.Good luck,-Chris

You can still use it as a STR and rent it out throughout the year and visit as well.