And, he has recommended us to be filed as an S-Corp for tax reasons.

Seems reasonable to me.

For some reason I believe I heard someone on BP discussing commercial taxes that were unrecognized during their analysis of a property and it significantly impacted the returns.Thanks in advance for any advice. 

Once you've got the stamp of approval from the city, is there any reason the utilities would have a problem from there, or is it typically just a matter of paying whatever crazy fee they require for the work?

Rinse and repeat.I moved out after two years for no other reason than their incompetence in properly fixing my HVAC.  

The reason for this is that after closing, the lender will fund the cost of materials first, over a determined number of draws. 

For numerous unexplained reasons (can't believe I'm typing this), we think a spirit may live there but would not call it haunted (think Poltergeist!).

Any advice/reasons to not do this?

I have found a hard money lender that can lend us the money to purchase with a reasonable interest rate and balloon payment 8 months after but is it too risky to plan on the house appraising and getting a home equity loan to pay them back? 

I prefer the 5-10 year strategy for a few reasons: 1.