I would probably send a notice that he is in violation of the lease and in the event that you have a user come in that disputes their right to those uses they will have to immediately cease.

And you’re right, that extra 3.5% funding fee would not be fun to pay - even if you did roll it into the loan.

If you're paying over 100x rent, it won't cash flow.Example:  If you have 4 units, each renting for $800, that's $3,200 in rent roll. 

My advice would to find some more extensive projects and get those rolling through the winter and have them ready to go in January/February/March. 

The due on sale clause could kick in so you might roll the dice there, even if you purchase in an LLC many lenders will require you to personally guarantee the loan. 

@Michael TrinseyIf you cash out the pension, you will pay income tax but no penalties as you are over normal retirement age.Alternately, you could roll the pension to a self-directed IRA and then the IRA could invest in real estate.  

I call it Control and Roll. sell one of your properties to raise cashput together a friendly joint venture - each member contributes some cash - 10 members at $5,000 should give you some buying power.

What are the odds of a newbie with no flips under his belt getting points rolled into the loan? 

i'd think if the place looks good and the rent roll show's they make their payments on time, i wouldn't need to go any farther. 

One quick thought on multi unit underwriting is that you'll always want to be able to get a rent roll and profit and loss report from the seller.