She keeps saying, "You will still handle THAT while on leave right?"   

Leaving a quick review of All County NEO in Cleveland and Columbus to hopefully save other BP members from the headaches involved with having this company manage your property.

I'm strictly concerned with ROI and how it looks to potential buyers.

Quote from @Eli Ling: thank you, what do you think of this email:I understand your concern about the ceiling leak and your assumption that it might be coming from my apartment.Since we both want to resolve this issue, I suggest contacting the HOA to involve a neutral third party who can determine the actual source of the leak.

It sounds to me like you've found value in the relationship enough to workout an offer that compensates everyone and doesn't leave you feeling in a weird spot.

What sort of issues are we concerned about?

most bankers are standoffish ;-)yes, the HML/PML will be higher cost, but my concern for you is the banker knows he can't do your deal, but will string you along for a while, ask for additional information that takes you time (and maybe cost) to put together and he ends up either ghosting you or taking 6 months to tell you no.I could be wrong and you may be dealing with a "unicorn" banker, but I believe a HML/PML that knows construction in your market will be easier to work with, actually close your deal, and end up "saving" you money in the long-term...just my 3 cents - even inflation has increased this!

If the answer to both added questions would be "yes", then you have a potential goldmine here.Combining the seller's concerns, and the reality of a big down payment being a negative to the seller (see Q: 1), you should be able to set the terms, with a lower DP, and controlled interest rate, to have this property CF and,...be able to sell the package to another REI down the road,...as long as you buy this using an LLC (a new one). 

Tell them what you're doing, give them the option to make their own decision whether they stay or leave.

When the money dries up, they'll leave just as quickly as they arrived and you may be stuck with a real mess.If it can produce more money as a short-term rental, do it yourself.