Congrats on your decision to create financial freedom for yourself.

I also have friends that own all manner of other small business that create a very nice living for them.Subway sandwich shops    Take and Bake pizza   Five Guys  Janitorial ( one buddy of mine from Napa owns a huge Janitorial concern in the north bay and just kills it.. another is in Vineyard management  with over 1000 employees he is raking 5k bucks an hour off of .. and lives in a 5 million dollar home over looking Silverado CC and he came from Mexico as a barber.. you have to love America.. 

I use Wave as well, creating a separate "business" for each property. 

Also have a conversation with the main city building inspector about any possible problem or if they are aware of any problems at that address. 

This will cover you shall any negligence occurs creating a loss for you.Installing cameras or having security is solely due to your discretion.

I questioned that when I read that but just figured I was just not yet aware of potential opportunities out there where you can get a bank loan for 90% of the cost (and pay PMI) or maybe bring in a partner or private investor to cover the other 10% of the 20% down payment to avoid PMI? 

However, there are some strategies regarding partnership shares between two spouses that may create a more beneficial tax situation with regard to income that's subject to SE tax- this is a more complex setup and should be done by a professional. 

Create a new, separate single member LLC to handle the residential transactions?

You could also contact one of the Chamber of Commerce to get their help for where you should locate and if he was aware of any future development that might effect you.  

I am aware of the tax benefits however like I may have mentioned, my next step in my investment adventure is to fix a house up and sell it in less than a year.