The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

I'd really appreciate feedback with regard to whether I should move forward with investing in real estate, or to let the desire go for the time being: I'm 34-years old, married, have 2-children under the age of two, own a home, and have a stable and good paying job.

Even if you have to pay a bit more now and have CF decreased, you will get the funds to continue deals and can reposition later. 

How much do I pay?

Best to have a month to month lease or one with a start and end date if you want them to leave on a specific date, that lets you move to eviction if they don't pay.

So my question is: if I wanted to save on the recording costs, keep the deed for my records, proactively pay taxes as they're billed (would coordinate with the company I buy the CFD from), then work with the borrower to get the deed recorded under their name once they've paid off the contract--am I putting myself at risk? 

Which that benefit alone ends up paying for itself in the long run.

Taxes wise I have opened up a high yield savings account and putting money into it in case I do end up owing taxes next year, but what do I need to be saving as far as forms, I don't have the tenants on a lease yet since this is my primary on the mortgage, but I am giving them receipts when they pay rent every month and keeping those saved.

At the end of the day, it's still technically a Single Family Home with an extra unit to help offset expenses, but not a "true" investment property or legal duplex.Does anyone have any ideas on creative ways to finance building this (besides Refi or HELOC)?

Landlord pays the bill.