If you are looking for forced savings of $900/mo, this may not be a bad option as you are probably paying down equity pretty quickly. 

Well if that small loan is in a bad area that can't sell, and big loan is in a great area, and the buyer got it at a steal, then it's not the case.You won't get many lending offers on low cost deals except for one company down in Philly, who doesn't mind taking over your property...

A good deal of it is cosmetic but as its an older building and the current tenants (month to month thankfully) are treating the place like the slum the current owner has let it turn into, there are plenty of less cosmetic fixes that will need to happen. 

@Jonathan Taylor Smith not a bad idea, but from what I understand he does not want an entity because he doesn't want to report to the IRS every 3 months, hes using an accountant, details I'm not sure.

I have found a huge difference in the way I am treating as an investor depending on the bank that I use.  

An umbrella policy is not a bad gap filler either.

Being conservative isn't bad thing (especially you're newer), but you want to be conservative and accurate at the same time. 

If you let it drive your decision making, it can turn out REALLY BAD.  

This may or may not be a bad thing but none the less, something you need to be aware of.

Normally, when you buy a property on a Wrap and you have a renter in there, it is simply treated as a rental with the same consideration as any other way you'd finance a rental.