They may have a clause in their mortgage that prevents them from selling to someone else while they still owe the bank.

Check to see if zoning or HOA rules, if any, prevent you from subdividing the lot. 

Most of the COVID programs allow for back rent to be paid to prevent eviction.  

Clogged toilet, appliance repair, tree roots in sewer.

I see it as just another stumbling block and preventing people to actually get started.

Here in Georgia we've not hit the problem but the leases I have do contain a clause that if the temperatures go below freezing the tenants are required to allow faucets to "drip" during the night to prevent pipes freezing. 

We pay all credit cards off every month and the only loan we have is our mortgage on our home.The problem is that every time we apply for a loan to invest in property, we’re told that self-employment is not ideal and that our debt to credit ratio prevents us from getting a loan.

Try to learn the easy things like fixing clogged+leaky sinks/toilets/tubs, how to replace light fixtures, fix doors that don't close properly, etc.

The seller conveyed a landlocked parcel and agreed to record a right of way to provide access.The discovery rule would likely prevent a statute of limitations defense. 

I can't speak for any lender and practice only in Texas, so YMMV.The LLC issue is to prevent the borrower from claiming the transaction is a consumer loan.