Being under priced and overbooked also increases wear & tear which reduces over-all profitability. 

might be a bargaining piece with an offer for a reduced price.Mold remediation is costly.  

Will be reducing the taxes (by half) on a property that I am in the process of buying.Residential Mortgage Lender: Closed 2 30 yr fixed mortgages with them.Commercial Mortgage Lender: Have 2 contacts that I got through my mentor and my Residential Mortgage Lender.  

If that is the case, the listing agent likely wants to make a deal and may be willing to reduce commission to get a deal done if they know they're going to have a problem selling.

You can lose capital gain rates, and reduce your basis substantially if you use a corp.

Getting a 10% return does not seem that bad given my strategy to pay extra principal payments through the extra cash flow per month and reduce my mortgage duration.

I also have reduced my coverage a little from what they quote me on replacement value. 

Can you reduce the downpayment, collect the cashflow then finance in about 5 years?

Any amount above that reduces their lifetime exclusion ($5.45 million per person) by the amount of the excess.The gift (of any amount) is not income to you nor a deduction to them. 

If they are still your strongest candidate, think about what it would take to help reduce the risk of the same thing happening to you.