On long-term rentals the bank likes to see signed leases which clearly you can't have with STR. 

My condition was that they rent the house for 1% of the costs and sign a 3 year lease.

Because of this, I put up a sign in the hallway that says we are now implementing quiet hours, and I gave each Tenant a piece of paper outlining quiet hours.

I saw a sign posted near the highway saying something like "flipping house training" so I called the number to see what it was about.

Let's assume that the neighborhood is a C class and the median income of the city is greater than 3X of the market rent.Here are some of the considerations I've come up with so far:- Units are in need of renovation and capex is too high or not available- Unit quality is not the same as market - Seller is worried about losing tenants due to increase- Vacancy rates are high or filling units have been difficult- Rent increase would take multiple increases over multiple lease periods to get to market rate if seller is trying to retain the same tenant- Seller inherited property and just want to liquidate- Seller needs to liquidate quickly (financial burden, sickness, quick exit from land-lording)It seems like I might be missing a warning sign about a deal if they are selling with current rents that are under market; but again, this seems to be most of the properties I've underwritten.And in the same vein, what should I be worried about when purchasing a deal with under market rent with the intention of raising them after purchase. 

I would advise running your rents conservatively and vet property managers properly before signing anything.

Put it in writing and have both of you sign it.

And I have a tenant locked in for a year at $1400 (they signed a year lease right before the house was put on the market in December).

And, they all sign the lease. 

Buyer's agency agreements were already required here before, our regulatory agency just went from strongly recommending them be signed right away but not really requiring them until writing a contract to 100% requiring them to be signed prior to showings.