Typically the cost of starting and maintaining an LLC are minimal, however this varies state-to-state.

It's up to you.Regardless of how you want it handled, you'll typically maintain a reserve fund for the PM company to draw from for authorized repairs.

- How difficult it and costly it is to operate/maintain LLCs?

I never visited that area but know and visited near that area, i know that the area is a moderate to high crime area. and i also know that for that area they do maintain consistent blue collar/factory type jobs. so as a rental area i think from what i have learned thus far, is that this is a good rental area barring the crime. where i choked was the distance, and started thinking how will i maintain it from a distance.my questions i guess would be. those who have experienced similar situations what did you do?

From the owner's perspective, it is or can be a nightmare if the home is not properly maintained.  

It obviously has been well maintained.

Option one mitigates risk w/ a partner, while they also have an invested interest to build at a good price while maintaining quality.

This will allow you to maintain a cash reserve and give you time to do the project.

Not every investor has to pay the $200, just the ones who don't want to maintain their property.  

They keep the house well maintained I have been over there 4 different times and it is always very clean.