At our heart, we're a tourist city which puts us at the mercy of the rest of the world's discretionary spending.

Sounds reasonable to me IF he is actually going to mentor you and be available and spend time pointing you in the right direction.

A sewer backup could be very costly (and quite nasty), so you should protect your property/investment by taking action.

I put that money in my rental bank account and don't spend it this year.

If your property was worth $250k, you have would generally have to spend $250k or part of the exchange will be taxable. 

Deal with a licensee on a listing,,,use standard contingencies to protect yourself.

I think the underlying problem here is the roofer (notice i did not say roofing company), had a bad previous experience from a different client and is simply protecting his behind from being burnt again.

Your address might be at this 4-plex, but the government can't dictate where you spend your time. 

It does slow a job down, but it protects you financially.

Down pay is quite a bit...35% ~$80k. 17.39% cash on cash ROILike Jad said, put it in a LLC to offer some protection.