Therefore, I would consider the two mistakes that cause them to fail to be the most critical.

You're either going to find out real quick who's taking care of it, who really owns it, or in 20 years, it's yours.You might also consider searching the archives at your local paper where the obit or legal notices were posted for the owners death or probate.The adverse possession aspect, however, would be real interesting.

(This reminds me of the gun thread, but you don't have to carry guns but you may want a safety plan in place.)Second, not to criticize you dad, but given this experience, I'm just wondering if you and he avoid this kid of land contract setup in the future?  

It says more about the person criticizing than it does the person that is doing the work.

The credit of the tenants and what is backing each lease is critical as well.Many more pitfalls than residential.The problem with your deal is that this is a very small balance loan in commercial.

Each house is unique in most aspects....energy bills vary greatly depending on the construction of the individual home. 

If I come across negative or critical on any post, call me out on it. 

I'm wondering if it would just be easier to forget the "business" start up aspect and just take all repairs as deductions and improvements as depreciations, as long as the house gets rented out the first year?

Molly welcome to BiggerPockets you definitely in the right place to gain a lot of information and a lot of knowledge about all aspects of real estate you now to help you out in whatever you choose to do good luck

Be aware of the important aspects of human nature, including emotion.