If I'm paying him directly, then he will have a vested interest in seeing me succeed and I'm less likely to be bashful about approaching him with land-lording questions as they arise. 

If they can be built much cheaper and people who would like to own but can't due to various reasons, biggest one being priced out of the market, this creates a real opportunity here to solve arising housing challenges.

For what it's worth, my past, and current management agreements state:  "Agent shall indemnify and hold Owner harmless from any loss, costs, damages, suits and expenses (including reasonable attorneys fees) arising from any negligent act of omission of the Agent"I'm not a lawyer, but that language makes me much more comfortable with the PM;  we both acknowledge our responsibilities and this clause tells me that the Agent is willing to take responsibility. 

The tax assessor will usually lag behind in a rising market. 

My goal is to have a clear answer to any tenant questions/property issues that arise by simply referring to my written policy/procedures.I also think this will help me find areas where my lease agreement is weak, so I can strengthen it for the next renewal or new tenant.Thanks and happy investing,Mike

A deed in which the grantor warrants title only against defects arising during the grantor's ownership.General Warranty Deed.

We resolved that issue (we thought) and were all set to close again when issue #2 arised.

Your biggest exposure is legal fees to defend yourself, not judgments, and having an LLC won't eliminate the need to defend yourself should the occasion arise (and if you get bigger, the need will arise, trust me).There may be some value in LLCs if you have substantial assets and are concerned about the exposure to those assets resulting from personal negligence.

When the first sign of trouble appears and the "I told you so's" arise, you may become a motivated seller.

Would there be problems arising in the future for me after becoming the owner on this property without it's building permits?