The more cash you can have at your disposal is normally the right answer in Single Family investing. 

The answer to your last question, I find, is normally "wishing I had started sooner.

Normally education COSTS money!

Will my normal Purchase Agreement Contract be okay to use for this deal?

...and what do you see as normal fees for a Prop Mgmt company?

Do they normally send an appraiser when you apply for a HELOC?

Normally I don't care what other people do with their rental properties, but I think this landlord is a dirtbag taking advantage of people AND the house is hurting my property value AND is a fire hazard to my house. 

If prices in your area are normally that low, it may be that a local lender will be expecting those small numbers and will be interested.  

Is this normal for Mi?

Rather than doing the messy and costly removal, they hire a normal contractor to skim coat the ceiling, I believe with normal drywall mud to achieve a smooth surface ceiling.