It doesn't matter that the rents aren't showing up on you last tax return, they will just take your gross rents from your leases and subtract 25% as a vacancy / maintenance factor and then subtract the new mortgage PITI from the remaining number.

I'm really unsure if I should be opening a new bank account for rent/maintenance, if I should be creating an LLC or just use my current bank account. 

I'm really unsure if I should be opening a new bank account for rent/maintenance, if I should be creating an LLC or just use my current bank account.

Roughly your break even will be 5.5k/mo worth of rent, forget about vacancy and maintenance and etc, they’re only good out of state, you only think how much you need and when you will sell.

Shop around, you should be able to get a property insured for less than $800/yearYearly maintenance - this seems low.

Low-maintenance, well maintained desert landscape. 

.$450K purchase price, 25% down...30 year fixed rate mortgage at 5% on $337,500 is $1,812 per month...So if you have zero vacancy you'll break-even on the mortgage...And then burn money on maintenance, cap-ex (likely very limited), any vacancy, property taxes, insurance, etc.Consequently, you really, really, REALLY need that home price to go up. 

I thought this would be common sense,  but I guess notIf they get off scott free, by lieing to me, and not have any consequences for their actions, it reinforces their behavior.I feel like I will write a letter, indicating the cause of the fire, confirm with them the electrical is fine.

Are there any deferred maintenance items that need to be addressed (i.e. air conditioning, hot water heater, etc.)?

I'd personally go the Section 8 route, but make sure to follow the advice of @Dennis W. and be sure to plug in Taxes, Insurance, and Reserves for Repairs / Maintenance, Vacancy, CapEx, and Property Management (even if you will be doing it yourself).