That will allow you to have some protection.

Collect the maximum damage and LMR allowable in your state to protect yourself.This couple is extremely high risk and having a co-signer will not prevent the train wreck you will likely face.

To protect you against anything they didn't discover or anything that could come up in the future that wasn't recorded at the time of sale they issue you title insurance.

I need to find a way to structure this business so that I am protected and our partnership is legal, too.  

in another word, how do you structure a good deal that protect me in the future.

I want better protection and if they are on a basic/generic lease, I cannot enforce any rights (other than ones set by law) that are not listed in the lease agreement.My main question is whether it is legally acceptable to have the tenant sign a my new lease as soon as I purchase the property, assuming they are willing to do so, and can I reduce the term (month-to-month) if their previous term was longer, again if they're willing to do so?

One way to protect yourself from the downturns that are certain to happen during normal ebb and flow would be to lock that rate in.

His explanation was that what counts are the clauses that you add, that will protect us as landlords but by reading multiple forums about residential lease, I've learned that it's not as simple as adding any clause you like. 

She is setting you up for a future lawsuit and you need to protect yourself. 

I know that LLC's provide an umbrella that can protect assets in case of personal shortfalls, but I would love a more detailed analysis of the pros and cons, especially in regards to taxes.