If your PM is not licensed and/ or using this agreement that might be a larger concern.

One of my bigger concerns is that it is on well and septic -- my concern is more that I've never dealt with that before -- but the owner said he installed a brand new septic system last year at considerable cost -- and, of course, I'd have both systems inspected as a condition of sale. 

Until just before lease signing I had not thought about this with water being in my name, but water will be in the tenant's name going forward, so do I need to be concerned about continuing to water the grass using tenant paid water?

Thats my real concern.

I have concerns that I will be tying my hands a bit if I eventually want to sell / develop the two lots together or if I want to hold for a bit and draw lines of credit against the lots.Thanks,Juan Monge

I would definitely talk to another lender cause the one who is giving you this advice may be a little wonky or possibly self serving. 

We have experienced some twists that have caused us to consider flipping the property instead of  holding it to rent.

I did some research and it looks like I can do a quit claim deed to remove him from the title but looks like it can cause some issues with the mortgage.

@Bob RenthammerWhat do you see that could a causing a supply shock or may cause the gov to increase regulation/monetary policy to the detriment of growth? 

All Contractors are subject to the lender’s determination that the contractors are qualified and experienced, have all appropriate credentials required by the state, are financially able to perform the duties necessary to complete the renovation work in a timely manner, and agree to indemnify the borrower for all property losses or damages caused by its employees or subcontractors.Multiple Specialized Contractors: Since this is a limited repair/renovation program, no General Contractor is required.