@Matthew C. several thoughts:1) Appears you have a Class C or D property. -- Thus, you can expect to get Class C or D tenants, which have a 15-25% probability of defaulting on their lease payments.2) If your PMC is lowering FICO to 550, what are they doing to improve their screening in other areas?

It's also easier to isolate and manage tenants, because they don't have any affect on each other as they do in MFH.

I've seen a few foreclosed properties around my area for less than $50k in neighborhoods where it would appear that if these homes were really fixed up they could ARV for $120k (or more).

Unless the medical condition meets the state criteria for early termination and that the medical notice does not appear to suggest that, you cannot terminate the lease outright/immediately but that you will begin to market the property for rental and upon securing an acceptable tenant, the lease can be terminated pending a satisfactory property walkthrough indicating no damages. 

It appears these investors merely provided unsecured loans to RAD who in turn purportedly made loans, although its unclear if that ever happened.

Quote from @Arthur Crum: It appears you may know something I don't.

@Joshua Bautista located in indianapolis.. i'm a 100% newbie at this.. but it appears that the winter times are quite slow in Indy..

At the current cost to build estimate $150/sqft, It appears a 1500-1700 sqft new construction will need to sale for around 399,9k to make a decent profit.

Big, covered, outdoor living areas also appear to be a winning amenity for each home. 

I see some larger single family homes in areas that appear to be zoned R2 that, at least from a physical perspective, seem like they could work for this.