With regards to the interest, where do the Applicable Federal Rates (AFR) come into play?

Brittany,If you are looking for a local REIA go to MeetUp and search Western Mass REI Club.

I would probably approach your tenant with this information and say, "If that is the way you want to play it, so be it... but be aware you are really screwing yourself if you go that way" and explain that situation to him.  

The attorney we use charges $800 for uncontested and $1,500 if contested. it's not wise to look for an inexpensive attorney when its hundreds of thousands of dollars at play.

I’m also considering the Hampden County area in Mass as well since my duplex is there.

It is a longer play, and you need to perform when they send you a deal.

Play around on Airdna or price labs to see what a private room would get per month, you can use this as a ballpark number to gage what you should rent for. 

We'll have to see how this plays out.

. ** (when i respond it is not just for the original poster but others that learn from lurking)Not only are they not typical results, the year the property was bought and the method used to purchase play a huge role.

Major value add play with outdated units.