The only reason to even consider an assumption in today's market is if there is a high pre-payment penalty that would make the sale free and clear unattractive to a seller.If you don't mind very low leverage, and there is significant upside that can he harvested when the pre-payment is either phased out or the new value is so great that the pre-payment is in-material to your return. 

The bank won't even consider an offer sent in without a POF, so there's literally no rational reason to send in such an offer... no reason to look at the listing... no reason for the agent (or you) to waste a single second of precious time considering taking the next step.

Hold them responsible and ensure they carry insurance.Now, with all those "layers" you can consider an LLC.

I don't think TRUST is the appropriate vehicle - - consider an LLC or S-Corp

I've told them it's a seller's market right now and most houses in our area are being sold between 1 wk and 1 month after going on the market, so if this house has been for sale longer than that (it has) and he hasn't had any offers (given the condition and location, I'm assuming not--I'm looking to use it for Section 8), he should really consider an investor's offer.  

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

I live in Southern California so maybe I’m a little biased but I can’t even think of anything that I’d consider an emergency I’d be able to resolve with only $400.

Interview as many lenders as you can an work with the lender you feel more comfortable and that is knowledgeable about the rules.Most likely you will have to get a conventional loan and put 20%- 25% down because the property will be consider an "investment" property.

Consider an hourly rate times 2080(number of hours in a typical 40 hour work week)

Until you can answer these questions, don't even consider an LLC no matter what state you choose to file under.