I appreciate the tips and will contact the zoning department to see what type of red tape has been installed.

Your could rent it out for a couple of years to avoid any red flags with the tax man.

If there are a lot of big items the company glosses over, that's a red flag.

Instead of offering to pre-pay the year (because you are right, most people see it as a red flag), try offering to sign a longer lease (a 2+ year lease could definitely help your case). 

@Anthony Polossine a quit claim deed is a red flag for a title company.

@Anthony Chara's tip was to ask the hotel where you are staying to circle the good neighborhoods in green and then the bad ones in red. 

What were some of the red flags you noticed?

You generally can't buy a property as a primary residence and then immediately switch it to investor financing (you likely wouldn't have the equity to switch it over) and if you refinanced it immediately it could red flag your loan for inspection.

I will check with sponsor if they are co-investing in this deal to know that whether they have their skin in the game. since you guys are in the syndication offering, so wanted to see if you see anything that is not in-line with market offerings or any other red flags.

NOW, having said that, I've been told there are steps you can take to combat the issue that arises from the "gift" stipulation...First, the "gift" (loan) coming from a family member raises far less red flags than does a gift coming from a friend.