It has proven to be more difficult to set up than expected mainly because of having to use a third party company for a physical business address1.

The harder part is enforcing violations.

What you put out of a way for parties to transaction to wrap transaction cost's into financing, is EXACTLY how we got to today's system.

My attorney told me because we are a third party there is nothing we can do and that I am at the mercy of seller’s attorney and TC/land surveyors.

If you were planning on using a PM company or third-party manager, this would add another ~10% to your monthly expenses, at which point I would no longer consider this to be a deal worth pursuing. 

I'm new to the party.

If so, the first thing to agree upon is the purchase price because the other interested parties are owed their share of the CURRENT VALUE not of the $500k paid ~40 years ago. 

Get a good understanding of disqualified parties and prohibited transactions.   

You could aim to get the studious, low key, chill type of tenant as opposed to the rambunctious party animals typically found in a college setting thus avoiding the types of "confrontation" that are likely to come with the latter.

When I told him that would be fraud on my part and I would not be a party to that he stated he would have to find another place.