Based on the information provided, you were fined for performing plumbing without a license, not that something was wrong with the plumbing.

I am purchasing a third duplex. the first two I put 25% down on, so have some equity there.

I think this covers me legally, and that way I don't have to deal with a third party sub-metering company.

Rochester performs a reassessment every four years so with just finalizing the 2016 project, the next reassessment will be for the 2020 roll."

A contractor, in the eyes of the law and anyone with contracting experience, is simply someone who enters into a contract to perform a service or supply goods.

Even though you aren't the one occupying the house, it is your credit and character 'guaranteeing' performance.  

@Eric Eastman, it does sound like performing mortgage notes would be a great way to invest your money without some of the time commitment it can take to manage rentals or definitely to purchase non-performing assets.  

Third unit delivered vacantMortgage, Insurance, Taxes: $2850 (4.25% rate on conventional 30 year)Down Payment: $150k (Was considering FHA, but since the property price tag is quite high, the monthly MI premiums would have been killer)Rental Income: $26,400Based on these numbers, is this a viable option for me?

how can one go about buying a second home, third home, and so on.  

We have third party property managers that do an excellent job for us.