@Mike Dymski I respect your experience and opinion.

However, we still maintained high standards and treated her with fairness and respect throughout the process as well.  

This why vetting upfront is so important.On the other hand, a larger contractor may have real assets in the company or even a reputation that they want to protect so they want to find away to avoid getting into legals which waste time and money for them.With respect to contract size, in reality anything under 100K is not worth a full blown lawsuit as the legals will eat you alive even if you win; small claims court may be your best bet if you are OK managing the process or maybe using a paralegal.On the emotional side, I strongly urge you to put that aside.

@Corina Eufinger  I respectfully disagree. 

Manage food ins/outs respective to what you use in a week or month. 

@Bruce Harding if neither you nor the seller are experienced with this type of property I would recommend you both consider the value of engaging an experienced agent to represent your own respective interests.

Do underwriting guidelines allow for one conventional mortgage that would cover the two duplexes or three houses respectively? 

The maximum return you can achieve through equity is 3.25% and 3.87% respectively.

Like I said 2005 ...it may appear lenders have loosened up standards but that is not reality in the mortgage market when you actually try to get one.I am a Mortgage banker and keep pretty close tabs on whats happening.. also i build new construction and sell retail so .. i just look at a sampling of the latest community i built and sold this year... 23 homes sold in 4 months..  3 for cash  1 VA  ( we accpet VA many builders dont but my wife and I respect our veterans and we go the extra mile to put them in one of our homes).. 4 FHA the rest conventional.in years past there would be no cash sales.. and literally all of them would be minimum down and conventional would be rare. 

I'd try to treat them with respect when it comes to ending of lease/rent increase, make your offer, see how they react.