The buyer was seeking a conventional loan. 

Now thats all groovy but the market is not liking it.. parking sucks and no yards.. so a few builders I know that did these little developments are not selling well and ( of course that buyer is very interest rate sensitive) so I personally wont do it..

In todays environment with higher interest rates there are less buyers in the market than a few years ago so waiting several years until rates drop to a more palatable range could lead to much higher returns.

I will look at a few factors, rent for area, total mortgage payment with property taxes( which can be crazy in Detroit), investment in neighborhood, I like looking into places where they are building homes and apartments that attract young professionals or families , and also looking at potential to make a single family home into a duplex or something can add an adu or transform a basement to a studio apartment!

Just do your best to get all tenants to sign the letters if a buyer asks for them. 

If I can line up a tenant during the option period, then I know I will win, and I can also win if another buyer comes in with a competitive offer.

I am a first home buyer.

Then they get something under contract, have a buyer all set up but no money!

The property is a full rehab, possibly more, and originally had restrictions from Freddie Mac requiring buyers to live in the home for at least a year, so I initially passed on it.

The second of two homes I bought when I sold the rental, I would have bought a more expensive one as the one I got was close to the university and tended to attract students which had higher turn over (though it may also be my local market).I'd also look up how to do a 1031 (I think that is what it's called, I'm not in the US) where you defer capital gains taxes on rentals by buying another within a set period of time.