Single Room Occupancy (SRO) or PadSplit / CoLiving are able to make a ton of income, especially if you modify the house with a couple extra bedrooms. 

As mentioned if the holding company is not solely holding or owning assets together funneling monies as a loan would further complicate if there is a default but also cause you to file extra tax returns = $...Yes you are taxed on interest income or any money that you make, does not matter how you structure it, what comes into play is not how much your taxed but how much you pay someone to figure out for you how much you need to pay and each layer is an added cost. 

Most people who buy 2+1 and think they can use the third and get busted on that, end up renting the bonus unit to the top or bottom unit as extra space, but that is a loss on what would be unit rent by more than half.

Consider the extra expense a capital contribution to the equity provided these are in good locations. 

On a fixed mortgage, i could pay extra payments (or a one time lump sum payment) and apply it towards principal.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

If they can't/won't pay the increase, reward them with an extra 30 days to move.

Townhomes have extra holding costs in HOA and could limit your renting ability.

After some research, I'm thinking it would be a good opportunity to proceed with the offer and to set aside the "free" money for use for repairs/renovations and holding costs to have some extra cushion.There seems to be much debate on the use of credit cards in real estate investing, but considering my circumstances .. 1.  

This way the investor has a quality property where all the payment is going to the mortgage so equity builds up fast and they can take the re-advanced funds and WAIT for the right opportunity for extra yield plays.