I don't know if the builder can prevent you from marketing the contract but if allowed I would start investigating sell it and walking away with some extra $$$.  

In my 15 years of Property Management experience, I typically see that the tenant is responding for reporting leaks and water intrusion immediately  in order to prevent any growth, but the remediation typically falls to the owner.

How much is reasonable  for  quarterly preventive pest control treatments for three units?

Since we’ll be renting it we want to put it in an LLC but are concerned that may prevent us from taking advantage of this 2-out-of-5 year rule?

She makes her rent payments through PayPal, so there's no way to prevent her from sending these payments.

Screw down your art work, bold your beds to the wall and do all you can to prevent damage.  

I'm sorry this happened to you, and it's one of the reasons that I try to use an estoppel agreement to cover clients who are inheriting tenants when they buy a building; not that it would have prevented this but at least it would give both sides of the story before closing. 

That usually prevents any complaints.I think the best thing you could do is extra padding upstairs.

Appraisal can prevent the policy holder from hiring an attorney if the outcome isn’t in their favor.

Use this as a productive measure to try and figure out how it happened,  and what you can do to prevent it, or prepare for it in the future!