It is imperative that you take this action to prevent fines and legal issues.

@Asher M.Possible, yes but like your lender pointed out it's going to be difficult to pass the self-sufficiency test (SST) for a legal 3-4 unit property.

Prospective investors should carefully consider investment objectives, risks, charges and expenses, and should consult with a tax or legal adviser before making any investment decision. 

I don't want to wait to fix this, because the urine could seep into the subfloor and legally speaking I need to mitigate my damages.

Here's a good folder setup.Bank StatementsCredit Card StatementsProperty Management StatementsMortgage StatementsSTR Platform StatementsInvoicesReceiptsClosing Documents (Purchase/Refi/Sale)LeasesCheck & Deposit ImagesVendor ContractsW-9’s & 1099’s

Talk to the management company and if you're not feeling things are right or legal, then take legal action.

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

Promissory notes are transferred by endorsing the back or a document called an allonge.

In terms of structuring the deal you can do it however you want as long as it is legal, ethical and agreed upon by both parties.

If you live in the basement then you can legally STR the top in most areas.