raise the rent to an appropriate amount for the current condition of the property.

Go find expensive houses that have sold in the condition you want to rehab them into (something like the end product you envision) and then see what they would rent for.

Also, I don't know about your market but with how fast homes are selling here a FHA offer is not very attractive to sellers because the property condition requirements are so stringent and they don't want to deal with headaches when they have 10 other offers.Feel free to reach out with any questions, I know if I had someone with experience to talk to when I first started I'd be much further along than I am now.

No, if you try and buy in an LLC you’ll have to use commercial lending which are different terms and conditions. 6.

you can use FHA again but have to move within 100 miles of the first property, also certain conditions apply under using it again ( new job , new baby etc)

They are seriously overpriced for the condition and need alot of maintenance.

The sellers know the market conditions and know other people will line up to purchase the property "as-is". 

With that said, if the tenant's have been paying on time and have kept the home in overall decent condition, then I don't see any trouble listing tenant occupied.

Without knowing the exact location or condition of the property I can't provide exact advice, but Id looks into other rental forms such as either Medium-term furnished rentals, or rent by the room to increase the rental income.

Do as much around your parents house to show appreciation for letting you live rent free.