Unless you could find another contractor to explicitly say the previous one was negligent, you're probably out of luck taking them to small claims court.

Which means an ARM, short term and more out of pocket costs.

Not sure I would write these explicitly in the lease but .......no hanging engines from trees, no fireworks, no grow rooms,  no taping things to the ceiling fans, No cigarette butts....

That will include financial information from the borrower, copies of tax returns, copies of last two pay stubs or other proof of income, a hardship statement, and arms' length affidavits.  

If they have a property management arm, then they get 6% for management.

The Holton-Wise group has a property management arm to their company.

Keep it small initially this way when you make mistakes the first time around, it doesn't cost you an arm and a leg.

It seems like doing the work to get a note re-performing would violate the "arms distance" rules the IRS imposes.  

Having said that, I thought one of the criteria was that sales or purchases had to be at an arms length or they couldn't be done tax free.

The reason is because your investment horizons is likely 5-7 years, and you can get cheaper financing with an ARM that will improve your cashflow and you won't have to worry about interest rate risk until later on when you decide to sell.