It sounds like you have a pretty good start on your investing ventures.

If asbestos is present and poses a risk, a tenant could, among other things, legally force the landlord to choose between removing the asbestos or losing rent. 

Neither can be climbed out of without the aid of tools, and this is no different.I'm looking (HARD) for an example where doing nothing and willingly losing $1000/month before you even get out of bed, house, feed, or clothe yourself is the "best course of action".

I would do that before I would go chasing low end rentals that may produce cash flow and could very easily lose money thereby making you work on Friday instead of golfing :)  

Typically people will tell you not to put your primary residence in an LLC because it makes it complicated and you lose out some of the tax benefits of having a primary residence (hence the need to consult a CPA). 

Also - One "Best Practice" item would be to make sure you notify your losing bidders, just a quick call to explain that you've selected a different contractor for this particular project, you appreciate their time for putting together a bid, and that you hope to work together in the future.

I'm just looking for more ideas, not to sell this to someone so that they can lose.

If they are too slow getting everything completed and they lose the unit to someone else, so be it.

Unless the interest and improvements racked up enough to cover the additional $10,000 paid by your partner over the auction bid price, your partner would lose $10,000 on a redemption.

And congratulations on venturing out and starting your own management company.Typically, this will range based on several factors - a couple of which will be: 1) your vendor relationships and, 2) your property management software.