I also want my investments to be safe and relatively easy to manage.

Some are probably related but some are not.

However, you can still create your own LLC or Sub Chapter S Corp through which can you run the income through and still deduct your investment-related business expenses through. 

Yes i would continue the repairs for you own benefit.

I don't think you'll find a good bookkeeper for what it's costing you now,  Add in taxes and benefits and it will cost you more.  

I've read through the FHA guidelines and you're right, it kind of takes away the main benefit of going with an FHA loan in that case. 

I personally would look at areas you know in both cities, and see if there are any city plannings or updates going that could potentially benefit in the long term.  

Recently, it has been hard to find enticing prospects and I'm beginning to think that I should lower my required return expectations given where we currently sit in the market cycle if I want to continue investing on LI.I'm still relatively new to RE investing.

Tell them you'll give them a few hundred bucks (or more if the deal is good enough) at closing.Keep in mind though that small towns are a lot of work for little benefit because you'll likely never turn up another deal in Edison so you just wasted a bunch of time building up relationships there.

Trying to think win-win to preserve friendship and also benefit rental business.