My wife is about to go back to school so she will not be contributing income as well as she will be tacking on a lot more debt to her initial student loans.

I wrote an article about it you might find helpful a while back if you're interested: https://www.biggerpockets.com/...

I've even seen distressed multi-families in some of the better neighborhoods sell to investors who convert them back to single families. 

However, I would reach back out to the title company you used to ensure that your policy would still be in place after the transfer from yourself to your LLC occurs. 

This goes back to doing more due diligence - talk to investors who have properties in those areas and to 5 experienced property management companies (instead of just 3) who will tell you what properties are renting for, potential problems, tenant base, etc

I would refer back to your owner agreement and hold their feet to the fire. 

We started buying and rehabbing properties around 2010, back then my wife some college friends and I did all the work ourselves we didn't know any subs or tradespeople. 

If water is common, is that billed back to the tenants or you as a landlord have to pay for it and that will eat in your profit. 

I'm only going to clear enough to build the townhouses and allow for parking in the front and small back yard maybe 60 feet. 

Two steps forward, one step back always moves you in the right direction.