If you haven't already, it seems worth the cost to bring in an inspector/contractor to get a good feel for costs.Unfortunately, I couldn't link to your pictures through the provided pdf.Also, it's tough to judge without any comps in the area.

Should I get a building inspector to give me his opinion on what needs to be done to salvage it and use that to help my case?

I am wondering what the city inspector will do when reviewing the work for our permit.

Would hire my own home inspector/appraiser/lawyer, etc. so not too many concerns there either.Where I am VERY spooked is in the tenant screening process.

I am seriously thinking of taking a home inspector class.  

or can I just leave everything hooked up andthe gauge connected to the main line, so that the inspector can see there's no leaks.

The inspector still insisted that they were a fire hazard ("with that much light, they're going to get too hot"), so I had to pull them out, put in a blank, pass the inspection, and then reinstall.Anyway, they all give plenty of light, and I don't have to worry about tenants getting on ladders to change bulbs.  

This is true regardless of where you're looking at properties -- in your backyard, or across the country.Working with an unbiased investment counselor/adviser can go a long way, in addition to other valuable team players on the ground such as professional property manager(s), home inspectors, etc.Investors purchase out-of-state properties every day. 

HelloDuring the inspection, the inspector found a hole under the house.

Besides the fact that I'll be living there, I like the landlord education that I will be receiving, all while saving a few $$s.Home Inspection:I had a very thorough inspection and the inspector identified a few issues.