He always tells me if he didn't have the motivation of the real estate side, he would have been more methodical and slow on the business side (which in this case would have cost him signifanct opportunity).I would think that Conor can probably give you a better idea than i can about the implications of owner-user designation from the banks, but in my experience the owner-user SBA route would definately help you do the first one or two, but after that i would begin to evaluate bigger structures where you take up less space and begin to peel one business away from the other. 

Lead paint is not a problem unless the paint is unsound (cracked, peeling, etc.)

Some of the inspected items are:- Does the property have electricity, water and sewer and is it accessible via a street- Heat source is required but a/c-Roof must not leak although this is a visual inspection only-Mechanicals must operate and be safe-No peeling paint-Smoke detectorsNO ONE SHOULD EVER RELY ON THE APPRAISER IN LEIU OF A PROPERTY INSPECTION

@Sam Leon Water dispersion is one of the characteristics of a Green Roof ;-)  It is quite possible the compost on your roof, and the matter growing in it, was masking the leaks.Termites are something with which we thankfully do not have to deal up here ... yet {I hear they are in parts of Maine now, so it will just be a matter of time and a couple of mild winters before they find the tasty old Second Empire, Queen Anne, Victorian .... buffet which awaits.

I have had fha appraisals (im a realtor and an investor also) almost fall through due to the appraiser noting peeling paint on windows, stained carpets, crayon and marker on walls, etc. 

Just keep analyzing properties and keep your eyes peeled.

based on the peeling paint alone, you will not be able to get the loan and this deal is dead and your EMD is coming back to you.  

He had safety glasses on and a dust mask on and so did my wife.

As long as the paint is not chipping/peeling, you have nothing to worry about - just paint over it.

I doubt the seller will be giving you months or years to peel off single sales, that is not his objective.