Make sure you’re comfortable with all the terms before diving in.

To me, this would have never been the conversation a few years ago when rates were more comfortable for the average investor (likely 5% and below), but it is the reality we are in now!

Then the buyer did some small things that didn’t give me much comfort...like holding the contract and changing terms.

It's going to be less comfortable and more work, but a SFH in a good location is going to appreciate much better than a duplex in a less desirable location. 

It made me feel comfortable right away. 

It's all about your comfort zone and how much attention you can give it. 

I would pay them again in a heartbeat because of the added value of weather protection on the home.I would look into a couple more quotes to give you a broad range, which might make you feel more comfortable in whatever direction you go.  

You'll want to use your skills and some creativity if you want to push yourself farther into the "profitability" side of the scale over "comfortability".  

The third option (like bottom barrel) would be to continue renting and save for bigger downpayment and wait for interest rates to come down more.Financially we are in place to buy a home comfortably under $400k.

I would also let them know you no longer feel comfortable hosting this guest.