The restaurant going under is definitely the biggest risk.

Talk this over with a lawyer because under current state law, you will not be able to evict due to the cold.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

To qualify for a loan, focus on having a credit score of at least 620 (or 580 for FHA loans), keeping your total monthly debt under 43% of your income, and saving enough for a down payment and closing costs—about 5-10% of the home's price in total.

Sounds like you’ve got some solid experience under your belt.

The investment itself seems to have been under-performing since the very first quarterly report.

Of course, if we have another available unit that's similar to the one they were looking at, I'll pivot to that and offer to move their current application over to that unit as long as they would still qualify under whatever the new unit's rent is. 

I always a little under my target amount ( a month interest and half the cost of the attorney) so they can negotiate. 

Get the house hack under contract and closed first.