To make sure I understand, it's for people who don't have a lot of time during standard working hours or individuals looking to test a market.

Now you pay taxes on all income including the positive amount from the Schedule E - business income deduction - standard deduction and other deductions and credits. 

A single family dwelling only needs one exit (required) and exits from a second story or basement may go through adjoining rooms providing the means of egress meets the code standard (stairs must meet minimum code at time of construction).

Lending standards are tightening, so don't delay.

Most of those costs are pretty standard and he should know that. 

Is this standard, am I just a skeptical, nervous rookie?

Banks have a liquidity problem right now and they are tightening lending standards.

trying to get loans for/in a LLC kicks you out of the standard conforming residential loans. 

Not enough information, as we would need.What your living expenses are currently.Do you plan to have a spouse and or children.Do you want both you and potential spouse to retire or just you.What do you want your standard of living to beWhat investments are you willing to make, because this isn't going to happen with savings alone.Many other factors play into this, so the best thing you can do now is just save as much as you can.

I have a friend who lives in Atlanta and has investments in New Jersey, Technology and a good team have enabled him to do this, but most importantly, he set up a system and trained his team on the system, that way its clear who, what, how and standards are maintained regardless of who is managing.