Numbers look really favorable based on your calculations! 

Sounds like she knows how the system works in her favor as a tenant and will take advantage of you as much as she can..

Read Every-Landlords-Property-Protection-Guide before deciding for more advanced asset protection structures.With an LLC you'll likely have to get a commercial loan - meaning you'll loose one of the main advantages of house hacking, the very favorable financing options in personal name.

This is investor-GC approach to control the cost as any overruns will eat up the profit:If you use a hands on type realtor they know what is wrong and what needs to be validated, what is fashionable and approx. low cost. 

If you are acquiring this property with a 0% down purchase money mortgage with favorable terms and creating a huge equity position, this may be the deal of a lifetime...likewise, if this is a 12m property you are buying at 10% of value...this is the deal of a lifetime...we can go on with scenarios for days...you've got to start looking at this through a different lens before you rule it out. 

So long as the property isn't chemically contaminated, they'll take the house and just knock it over.2) They buy 50 properties sight unseen, knowing that a handful will be absolute disasters, but the law of large numbers are in their favor that the ones that's aren't terrible can be purchased cheap enough to where it doesn't matter.3) They have a rehab crew / contractor and they just need a junker property to keep them busy on days when they aren't working on another major project.  

There are also other sellers in different situations that work in your favor.

The lender said terms would be more favorable with taxes/insurance put in escrow.

I was looking in a similar fashion to you for a few years--find a home to live in for a little while, then rent it it out after we found the place we wanted to settle down.

Meaning that even in an eviction the judge may award in your favor minus the late fees.