[pdwestman]

Another thing worth noting is that if the bike is set to full choke and I give it some throttle while trying to start it fires up very quickly.Even when it’s cold. The problem is no matter what I do it will not start without the choke on full and throttle. It’s also worth mentioning that after it’s warmed up it starts no problem without the choke and throttle.

You are describing the classic symptoms of 'Low Compression' at start up because of Too Tight of Valve Clearance, especially on the RH Exhaust valve which has the KACR (Kawasaki Automatic Compression Release) on its cam lobe.
Compression specs with an active KACR are 77 - 124 psi with Wide Open Throttle.
Opening the throttle creates More Cold Cranking Compression.

With a clean engine & spark plug pocket, I recommend you perform a WOT CCC test to see what it currently has.
Then measure valve clearance, adjust all to the upper half of specs. Then perform another WOT CCC test to how much was gained.

You might ought to look & see if the air filter has been passing dust due to lack of oil or a split seam. This causes rapid valve & seat wear, as well as piston. ring & cylinder wear, which attributes to low compress and excessive oil consumption.

 

[pdwestman]

So I just have a few questions. I don’t know much about valves. When you say loose does that mean the largest number (meaning the largest clearance? And is this done with those shims or is there just an adjuster?

Your posting tells me that as a bare minimum, you need to purchase a Clymer service manual for your 1987-2007 KLR650, about $38.00 and read the pertinent sections & procedures.

Do you have any/many basic Metric hand tools?
Bare minimum, you will need to purchase a 1/4" drive torque wrench calibrated in Inch Pounds with about 40 -200 inch pound range and a 15 blade feeler gauge set from .0015" to .015" and understand how to use them.

Or possibly better yet, take your bike to a professional shop before you make an expensive error. Maybe the previous owner already made a semi-expensive error which may be causing the oil leak. A professional shop should know how to best assess a possible issue.