3) With limited parking, is it worth entertaining the idea of just killing the garage?

I called around the area and very limited availability.

On the other hand, if you're looking to do more traditional buy and hold type deals and you're new at this, then yeah, I would agree that working deals in your vicinity is a safer approach, albeit limiting.

Lots of restrictions on renting in many places....we just passed a law here in Texas for example on September 1st that limits HOA approval of tenant. 

-Amount $146,000.00 ($136,000.00 Purchase Funds + $10,000.00 Rehab Holdback)-Terms Two months-Rate: 12%-Fees: $3,920.00 Total Fees. 2% Origination Fee, $500.00 Loan Processing Fee, plus all reasonable closing costs, including but not limited to appraisals, title work, legal, etc and the $250.00 doc prep fee..

Advocates for LLCs owning properties always underscore the value of an LLC to protect the properties it controls limiting liability to only those assets in the LLC. 

Many states require an LLC to borrow hard money. (3) Decreases liability, minimally, from legal action.Cons: (1) Costs to own and upkeep. (2) Often adds a costly step to buying property, as banks tend not to lend for single family housing directly to an LLC and therefore must be transferred from personal ownership into LLC. (3) Only limits liability if set up correctly—and many aren't. (4) Transfer from personal name to LLC can trigger "due on sale" clause.I'm probably the rare one around here who owns all my rentals under my own name.

I would likely not offer a unit as part of the compensation, because in doing so you limit yourself to only people who are looking for a place to live and can accept a 1/1.

That last part is important because as you've found, the market may have plenty of opportunity but you're priced out of it as a new investor with limited capital. 

There is no legal limit to how many times you can close an FHA loan.