So I always advise using a home inspector....unless of course you have a very competent contractor with you.

1.Have an asphalt company come and do a 1 inch overlay using a sand mix . 2.

For some background, I bought a 4plex using a 3.5% down FHA loan about 5 months ago and live in one of the units.

You are using all of the terms in an unorthodox way that does not allow me to analyze your numbers.Putting your terms (cap rate, equity, LTV, etc.) aside, but just using a $16k one time fully taxable pay day (flip) vs a $10k non-taxable event of taking out a mortgage with $138/mo of positive cash flow is a near "no brainer" as I see it. 

It appears they were either short-nailed (3 nails instead of 4) or applied using a nailgun with the pressure set too high (over-driven).  

I know this will probably differ by state, but are there legal reasons for using a remediation company versus doing it myself?

Bona fide occupancy as a personal residency...Next time you have a buyer that wants to buy a house using a govt loan and intends to move out in 12 months and rent the house out and then apply for another govt backed loan to do the same thing, just disclose that at time of application as your plan.  

Also, for tax purposes, I have been instructed in my case to flip using a S-Corp, and hold my long term rentals in LLC's.This is not legal or accounting advice, just third hand info from my experiences.

I wouldn't have a big problem with an e-mail, from a cell phone, in text-eze, but I would draw the line at them using a nickname.

Possibly using a 50 state check or simply using the state of Michigan online for their history?