Some minor plumbing issues but nothing crazy.Selling the place?

Find a lawyer and issue a lease violation for other issues such as excessive noise and furniture removal.

Any legal issues I should be aware of in this situation? 

Second biggest mistake is failing to realize these construction loans allow draws on improvements meaning cash expenditures are required before the first draw can be issued.

The Fannie and Freddie programs handle this issue slightly differently.

It does however give you a degree of independence to choose what you want to do.As your portfolio grows you'll also feel the weight of future capex responsibility more, which ironically points you to growing more cash flow through more real estate.The other issue is that you are chasing a moving goalpost.

That will be an issue if you change it to try and make it contingent on financing.

Based on a quick answer from Perplexity it seems like there would be no issue with you buying the home and collecting passive income, but you may not be allowed to manage it yourself since that is considered active work.

Assume a couple of months of vacancy, consider potential unexpected repairs (like HVAC or plumbing issues), and test the numbers with rents dropping by 10-15%.

We hardly ever get a call or text about any issues.